Workshop Manual: The business case for carbon farming: improving your farm’s sustainability

This workshop manual covers business considerations for farm owners examining carbon offsets projects for a farm-based business. First published in 2015, key sections of the Manual were updated in January 2021 during the development of this this online version.

 

Workshop Manual: The business case for carbon farming: improving your farm’s sustainability
Workshop Manual: The business case for carbon farming: improving your farm’s sustainability Workshop Manual: The business case for carbon farming: improving your farm’s sustainability Workshop Manual: The business case for carbon farming: improving your farm’s sustainability Workshop Manual: The business case for carbon farming: improving your farm’s sustainability Workshop Manual: The business case for carbon farming: improving your farm’s sustainability

Workshop Manual: The business case for carbon farming: improving your farm’s sustainability

  • 31st January 2021

Introduction

This workshop manual covers business considerations for farm owners examining carbon offsets projects for a farm-based business. First published in 2015, key sections of the Manual were updated in January 2021 during the development of this this online version.

 

The Australian Government’s original Carbon Farming Initiative (CFI)—which enabled farmers to earn Australian Carbon Credit Units (ACCUs) through carbon farming—commenced in 2011.

This scheme was folded into the Emissions Reduction Fund (ERF) in December 2014.

The ERF was rebranded as the Climate Solutions Fund (CSF) in February 2019, however ERF still tends to be used when referring to the Fund. In this guide, ERF and CSF are used interchangeably. 

The ERF (as configured at the time this manual was prepared) is intended to provide continuing encouragement for carbon farming.

Throughout this manual, we refer to both the Carbon Credits (Carbon Framing Initiative) Act 2011 and the ERF as the policy instruments for carbon farming activities that can generate ACCUs.

Please navigate this manual via the full contents list below.

The "Inside this Report" box in the right hand column also allows you to go to the first page of each chapter.

Additionally, on each page you can click through to the next or previous section via the links in the blue strip that appears above the main body of text. You can also access the full contents in a dropdown menu by clicking on the three horizontal bars in the blue strip.

1. Introduction: background to the business case

This chapter lays out the basic background and groundwork of the manual

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1. Introduction: background to the business case
1. Introduction: background to the business case
1. Introduction: background to the business case
1. Introduction: background to the business case

1.1 Overview

Introduction: background to the business case

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1.2 Being clear about the reasons for participating

Introduction: background to the business case

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1.3 Key steps in a decision process

Introduction: background to the business case

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1.4 Working through the business case for carbon farming

Introduction: background to the business case

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1.5 Factors determining project economics

Introduction: background to the business case

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1.6 Elements of the business case

Introduction: background to the business case

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1.7 Building an economic case

Introduction: background to the business case

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1.8 Important features of the business case

Introduction: background to the business case

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1.9 The plan of this manual

Introduction: background to the business case

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2. How carbon is farmed under the ERF

This chapter considers in detail the activities that constitute carbon farming

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2. How carbon is farmed under the ERF
2. How carbon is farmed under the ERF
2. How carbon is farmed under the ERF
2. How carbon is farmed under the ERF

2.1 The scope of carbon farming under the ERF

How carbon is farmed under the ERF

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2.2 Emissions avoidance activities

How carbon is farmed under the ERF

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2.3 Sequestration activities

How carbon is farmed under the ERF

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2.4 The negative list

How carbon is farmed under the ERF

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2.5 Carbon farming under the Emissions Reduction Fund

How carbon is farmed under the ERF

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2.6 Who's who in the CFI and the ERF

How carbon is farmed under the ERF

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3. The policy context and the price of ACCUs

This chapter takes a broad look at the policy context for carbon farming

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3. The policy context and the price of ACCUs
3. The policy context and the price of ACCUs
3. The policy context and the price of ACCUs
3. The policy context and the price of ACCUs

3.1 The policy context

The policy context and the price of ACCUs

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3.2 A documented climate challenge…

The policy context and the price of ACCUs

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3.3 … with numerous policy responses

The policy context and the price of ACCUs

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3.4 Australia's 2020 emissions target

The policy context and the price of ACCUs

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3.5 Australian policy instruments

The policy context and the price of ACCUs

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3.6 International carbon markets

The policy context and the price of ACCUs

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3.7 What determines prices in carbon markets?

The policy context and the price of ACCUs

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3.8 Recent prices in compliance markets

The policy context and the price of ACCUs

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3.9 Recent prices in voluntary markets

The policy context and the price of ACCUs

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3.10 Price formation under the ERF

The policy context and the price of ACCUs

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3.11 What prices should you use in the business case?

The policy context and the price of ACCUs

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4. Ensuring that abatement is real

Addressing the need to ensure that abatement is genuine

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4. Ensuring that abatement is real
4. Ensuring that abatement is real
4. Ensuring that abatement is real
4. Ensuring that abatement is real

4.1 The need for strong integrity regulation

Ensuring that abatement is real

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4.2 The integrity standard

Ensuring that abatement is real

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4.3 Methodologies are at the heart of the ERF

Ensuring that abatement is real

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5. Learning from existing methodologies

What is required in a methodology or method for it to be approved

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5. Learning from existing methodologies
5. Learning from existing methodologies
5. Learning from existing methodologies
5. Learning from existing methodologies

5.1 Currently approved agricultural methodologies

Learning from existing methodologies

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5.2 Examples of approved methodologies

Learning from existing methodologies

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5.3 Implications for the business case

Learning from existing methodologies

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6. The regulatory steps to participation

An overview of the key steps involved in applying for approval

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6. The regulatory steps to participation
6. The regulatory steps to participation
6. The regulatory steps to participation
6. The regulatory steps to participation

6.1 The Clean Energy Regulator

The regulatory steps to participation

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6.2 Steps for participating in the CFI

The regulatory steps to participation

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6.3 Steps for participating in the ERF

The regulatory steps to participation

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7. Options for participation

The costs and benefits of different ways of organising your participation

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7. Options for participation
7. Options for participation
7. Options for participation
7. Options for participation

7.1 Legal rights to carry out a project

Options for participation

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7.2 The business structure for participation

Options for participation

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7.3 Aggregation under the ERF

Options for participation

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8. The business case: project revenue and co-benefits

Potential revenues from different project types

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8. The business case: project revenue and co-benefits
8. The business case: project revenue and co-benefits
8. The business case: project revenue and co-benefits
8. The business case: project revenue and co-benefits

8.1 Project revenue

The business case: project revenue and co-benefits

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8.2 Revenue examples from Western Australia

The business case: project revenue and co-benefits

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8.3 Potential sequestration and revenue from environmental planting projects

The business case: project revenue and co-benefits

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8.4 Potential sequestration and revenue from soil carbon projects

The business case: project revenue and co-benefits

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8.5 Revenue and the business model

The business case: project revenue and co-benefits

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8.6 The value of co-benefits

The business case: project revenue and co-benefits

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8.7 Constructing the revenue and co-benefits modules

The business case: project revenue and co-benefits

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9. The business case: costs of establishing and running a project

Preparing and operating an ERF project will involve a variety of costs

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9. The business case: costs of establishing and running a project
9. The business case: costs of establishing and running a project
9. The business case: costs of establishing and running a project
9. The business case: costs of establishing and running a project

9.1 Who bears the cost?

The business case: costs of establishing and running a project

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9.2 Timing of costs

The business case: costs of establishing and running a project

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9.3 Minimising costs

The business case: costs of establishing and running a project

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9.4 Ongoing costs for sequestration projects

The business case: costs of establishing and running a project

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9.5 Indicative costs for planting or forest-related sequestration projects

The business case: costs of establishing and running a project

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9.6 Indicative costs for projects related to soil carbon

The business case: costs of establishing and running a project

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9.7 Taxation

The business case: costs of establishing and running a project

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9.8 Establishing the cost module

The business case: costs of establishing and running a project

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10. The business case: risks and net benefits

Carbon farming involves risks that need to be understood and managed

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10. The business case: risks and net benefits
10. The business case: risks and net benefits
10. The business case: risks and net benefits
10. The business case: risks and net benefits

10.1 Bringing the revenue, co-benefit and cost modules together

The business case: risks and net benefits

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10.2 Overview of risks

The business case: risks and net benefits

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10.3 How to analyse risk in quantitative terms

The business case: risks and net benefits

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10.4 Systematic risk analysis: an illustration

The business case: risks and net benefits

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10.5 The relative importance of different risk factors

The business case: risks and net benefits

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11. Where to go for more information

There are many sources of information on carbon markets

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11. Where to go for more information
11. Where to go for more information
11. Where to go for more information
11. Where to go for more information

Appendix A

Summaries of selected emissions avoidance and sequestration methodologies

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Measurement of soil carbon sequestration in agricultural systems method

Appendix A - Summaries of selected emissions avoidance and sequestration methodologies

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Sequestering Carbon in Soils in Grazing Systems (now closed)

Appendix A - Summaries of selected emissions avoidance and sequestration methodologies

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Human-induced regeneration of a permanent even-aged native forest

Appendix A - Summaries of selected emissions avoidance and sequestration methodologies

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Reforestation and afforestation

Appendix A - Summaries of selected emissions avoidance and sequestration methodologies

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Reducing greenhouse gas emissions by feeding dietary additives to milking cows

Appendix A - Summaries of selected emissions avoidance and sequestration methodologies

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Animal effluent management method

Appendix A - Summaries of selected emissions avoidance and sequestration methodologies

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Appendix B

The Carbon Farming Initiative: Tax implications of the Carbon Farming Initiative

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Appendix C (1)

The Carbon Farming Initiative: legal and contracts summary

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Appendix C (2)

Complying with a methodology and starting a project

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Acknowledgements and other key information

The business case for carbon farming: improving your farm's sustainability: workshop manual

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Acronyms and abbreviations

Acknowledgements & abbreviations

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