What stops small farms from cashing in on carbon?

“We can automate nearly everything, can’t we? We can fly to the moon, but we can’t make one of these methods simple enough for a farmer on their own to undertake.”

Director of Carbon Farmers of Australia Louisa Kiely says there’s never been a better time to sell carbon offsets. Australian carbon credit units have existed in some form or another for a decade, and their prices are currently soaring. But, while agricultural land remains one of the most effective sinks of carbon dioxide and farmers stand to make increasing profits off selling carbon credits, there are still plenty of potholes in the back paddock.

“Even without a government policy of net zero by 2050, every company with shareholders understands that they must be responsible in the face of this known risk,”  Kiely says.

Businesses are increasingly interested in offsetting their carbon emissions, and this is driving the price of carbon credits up. According to the Clean Energy Regulator’s most recent report, spot prices for Australian Carbon Credit Units (ACCUs) reached record highs of $22.40 per tonne of stored CO₂ in August.  And that number is rising.

In Australia, farms have a range of different ways to store carbon that earns credits. This includes planting native trees or conserving native forests, increasing carbon in soil and reducing herd methane. The accounting and measurement on each of these are thorough: the regulator wants to ensure that each tonne of carbon sold is genuinely being stored.

According to Kiely, it’s this measurement and accounting that holds small farms back from selling credits. “Everything is about numbers and scale.”

Small farms still have to do the same amount of measurement, verification, and monitoring as large farms – But they don’t have the same capacity to store carbon.

“The costs are the same if you have 50 hectares, potentially, as if you have 500 hectares,” says Kiely.

It is possible to aggregate several small farms together to earn credits. “The one that I always advocated for aggregation is a tree planting exercise,” says Kiely.

Native forest planting is a relatively simple method of carbon storage, from a verification perspective: the trees have to be native to the area, reach at least two metres high and cover 20 per cent of the area, and the amount of carbon stored by the forest is simple to calculate.

“The mechanism is the same for everybody,” summarises Kiely.

But aggregation isn’t widespread, particularly with any method other than native forestry. As a result, it’s difficult to coordinate the costs and methods of carbon storage between farms.

What would boost small-scale carbon farming?

According to Kiely, a lot of the answers lie in automation and digitisation. At present – excepting tree planting – all of the methods of calculating carbon storage need to be done manually. And carbon storage, particularly in soil, is a precise science: practices that increase carbon storage dramatically on one farm might be ineffective on another.

Nevertheless, there are ways to calculate carbon storage automatically. “Bigger companies do it all in house, and they’ve probably got their own software,” says Kiely.

“But that’s not helping the smaller farmer.”

In Kiely’s opinion, a public software platform that could estimate carbon credit earnings – a sort of reverse-climate-footprint calculator – would significantly increase uptake.

“[We need] a software platform. So all that I do, as a farmer, is type in things like how many cows I have, my land area, […] and it spits out a number,” says Kiely.

Carbon Farmers of Australia will be running a carbon farming conference in Albury in May 2022, following their 2019 conference.