The carbon market: Opportunities and challenges for Tasmanian farmers

Posted 25 March 2024

Climate change is one of the greatest challenges of our time. Governments and markets across the world are moving towards new environmental standards focused on reduced carbon emissions. To protect the environment and meet changing requirements, Tasmanian farmers should consider their emissions and how they could move towards net zero.

We spoke to three carbon and forestry experts to discuss current and future opportunities for the agricultural sector in a carbon neutral economy.

Rod Keenan, Professor at University of Melbourne, and Forestry and Climate Change Researcher

‘Famers are under increasing pressure to demonstrate sustainability and carbon neutrality, particularly livestock farmers’, says Rod, ‘so they’re looking to use trees on farms to offset their emissions.’

‘A broad benefit of trees on farms is increased carbon stocks. By increasing carbon stocks, farmers can participate in the carbon market. They can sell credits to the market, or they can offset their own greenhouse gas emissions on the farm.

‘The rate will depend on the site conditions of the property, the types of species that are planted, how they’re managed and the extent of plantings. Whether you want to use trees to sell carbon credits or as a way of offsetting your on-farm emissions, you’ll need to be able to measure it.

‘One of the main challenges is that carbon accounting costs can be considerable, particularly if you want to sell into the credit market. Plus, trees have a maximum rate of sequestration before slowing down over time.

‘So staging plantations is a good thing to do. It helps you learn by doing. You can plant a smaller area and see how those trees have survived and grow. You’ve got the opportunity to adapt your approach – and it helps to even out that longer term sequestration.

‘If you want the trees to perform, you need to choose the species that are suited to the site and be able to produce the functions and services. Some exotic species such as radiata pine can be quite beneficial for carbon sequestration.’

‘If people want to understand their greenhouse gas emissions, they can use tools that enable them to calculate their emissions from their operations. They can learn from what others are doing and by sharing knowledge, they can contact local programs to help them connect with the industry.’

Geoff Roberts, Director of Carbon Projects and Supply Chains at FLINTpro

‘Tasmanian farmers should be aware of carbon policies and the implications for agriculture. Big supermarkets and other buyers of agricultural products are likely to have existing commitments around net zero,’ says Geoff, ‘so it’s good idea to start paying attention.

‘There’s scrutiny happening into supply chains. Landholders are being pulled into a net zero world, which is moving from voluntary arrangements into more mandatory requirements.

‘Farmers can offset their carbon liabilities with carbon accounting. The other opportunity is to generate Australian Carbon Credit Units, which organisations can purchase. The benefit is, farmers can get money as long as the tree grows, so you bring forward the financial benefit of those trees.

‘But you cannot use any carbon credits you’ve generated and sold, to then offset your internal emissions. There’s a strong distinction between developing a carbon credit and doing carbon accounting.

‘There’s lots of organisations that help in the carbon space, so farmers don’t have to go it alone. Tasmania is really well placed to a very green and clean agricultural centre. It’s got the right climate to support a lot of good management practices for lowering the carbon footprint.

‘It’s about being strategic. People should be looking at their land, getting the right trees in the right locations to maximise the productivity and carbon benefits of that farm.’

Richard Ekhart, Sustainable Agriculture Professor at University of Melbourne, and Director of the Primary Industries Climate Challenges Centre (PICCC)

‘Net zero farming is doing the best you can to reduce your greenhouse gas emissions, then using carbon sequestration to balance the emissions to end up with a result that is either a positive carbon balance or a net zero balance,’ says Richard.

‘There’s a global race happening, because all multinational companies have set carbon targets, which start somewhere around an average of 30% less emissions by 2030.

‘To access those supply chains, to be in front of the queue, farmers have to meet those targets. How do you do that? You either de-stock, which isn’t profitable, or you plant trees.

‘A Tasmanian dairy farmer that’s able to produce 30% less emissions because they’ve planted 10% of their farm to trees, would be at the head of the queue in supplying to organisations who have to meet carbon targets.

‘But it’s not all about carbon. We believe the next target coming at agriculture is biodiversity. Those conversations are happening already. By 2030, everybody will be doing carbon, but not everybody will be doing biodiversity. So when we switch into biodiversity, if you’ve planted a tree, you’ve already got it. Being ahead of the game is in your interest.

‘So keep in mind the biodiversity, the diversification of the operation. If you plant trees with all that in mind, you’ll get the right financial benefit back to the whole farm.’

Learn more about the carbon benefits of trees