Workshop Manual: The business case for carbon farming: improving your farm’s sustainability (January 2021)

7.2 The business structure for participation

Options for participation

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

Explore the full Workshop Manual: The business case for carbon farming: improving your farm’s sustainability (January 2021)

 
There are a number of ways to structure your participation in the ERF. The alternatives involve differing extents of coordination and contracting with other businesses. The different approaches involve sharing different aspects of project operation, management and risk.
Each option has a different way of sharing the costs, benefits and responsibilities for the project. The broad options are summarised in Table 7.1 and discussed further below. In addition, Appendix C (Section C.9) sets out the legal details for contracts that may be formed under any of these arrangements.

  Table 7.1: Models for participation in the ERF

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7.2.1 Individual landowner 

A landowner can be the project proponent, be a recognised offsets entity, and undertake the project. They retain all responsibility for the project and receive all the ACCUs. In this case, all the costs and risks (as well as the benefits) are incurred by the individual landowner.
 

7.2.2 Cooperative groups of landowners

Groups of landowners can create informal cooperatives to share knowledge and reduce costs. A cooperative could be facilitated by a natural resource management organisation or a government agency. Each landowner in the cooperative needs to be a recognised offsets entity and be the project proponent responsible for the project on their land in order to receive the ACCUs.
 

7.2.3 Landowners using agents or representatives

The landowner may choose to use agents or representatives (probably on a fee-forservice basis) for particular aspects of managing the compliance associated with the CFI.
Agents - An agent can make or withdraw ERF applications, provide information in relation to an application or request and give notices or submissions with respect to the offsets project. The agent does not need to be the project proponent, be a recognised offsets entity or hold an account in the National Registry of Emissions Units, and would not receive the ACCUs.
Authorised representatives - An authorised representative may view the details of the registry account and initiate and approve transactions in relation to the account. They do not need to be a recognised offsets entity or hold an account in the registry and would not receive the ACCUs.
 

7.2.4 Landowners using service providers

The landowner can use professional service providers to undertake any part of their project, including obtaining approvals and reporting on the project, undertaking the project, or both. The landowner would generally be the project proponent and the recognised offsets entity responsible for the project and receive the ACCUs. This arrangement would be mediated through an appropriate contract and would be on a fee-for-service basis.
 

7.2.5 Landowners working with aggregators

Landowners may choose to use an aggregator to participate in the ERF. Some examples of aggregators are provided in Box 7.1.
The aggregator would generally be the project proponent and recognised offsets entity responsible for the project, including for the submission of project reports and audits, and receive the ACCUs.
Depending on the contract between the landowner and aggregator, the landowner or the aggregator may carry out and manage the project.
 

7.2.6 Which arrangement is best?

The factors that determine which of these arrangements is most suitable for a particular farming enterprise are:
  • the exact nature of the contract with the carbon aggregator.
  • the requirement for the landowner to share the risk (and consequently the returns) from the project
  • the expertise of the individual farmer and their willingness to devote their time to the requirements of the ERF project
  • the complexity of the method and the need for specialist input in operating according to that method
  • the relative cost of engaging agents and service providers
 
  Box 7.1: Carbon aggregators - examples
There are a number of alternative arrangements for the ownership and control of the land depending on the preferences of the developer and the landowner. In some cases, the aggregator purchases or rents land from landowners and owns the ACCUs that are earned on the land; in other cases, they manage the project on behalf of the landowner, who maintains the rights to the carbon credits.
These companies operated both in the compliance markets and in voluntary carbon markets. An aggregator has the same requirements as any other participant to substantiate their legal right to undertake the project, and responsibility for the project. Several registered companies are listed here:

Greenfleet
Greenfleet has been operating for 20 years and plants a mix of native species that would have existed locally before land clearing. The company looks for suitable sites for its revegetation projects (larger than 50 hectares and with annual rainfall of at least 450 mm).
The company establishes agreements with the landowner detailing the commitments and rights of each party to the land and the carbon sequestered, as well as the responsibilities of each party. Generally, the landowner is responsible for preparing the site with fencing, weed control and soil preparation, and for maintaining the land and notifying Greenfleet of disturbance events.

Carbon Conscious
Carbon Conscious develops forestry projects in Australia and New Zealand for the sale of credits to mandatory and voluntary carbon markets.
In Australia, Carbon Conscious targets its operations in marginal areas of the wheat belt, planting mallee eucalypt trees because they can withstand drought and regenerate after fires.
It looks for blocks of land of at least 200 hectares.

Select Carbon
Select Carbon supplies credits for the voluntary market. Under a CFI project, Select Carbon plans to plant 1500 hectares of native conifers in the southern Atherton Tableland over a seven-year period.
The trees were chosen because they grow natively in northern Queensland, are wind resistant and store significant volumes of carbon over long periods. Select Carbon looks to partner with farmers in the region to establish and manage the plantations.
 
There are many more carbon aggregators, and as the ERF evolves more organisations are likely to provide these services.
 

 

 

Explore the full Workshop Manual: The business case for carbon farming: improving your farm’s sustainability (January 2021)

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RESEARCH REPORTS

1. Introduction: background to the business case

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

RESEARCH REPORTS

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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2.1 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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3.1 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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