How much income can you make from soil carbon farming?
Soil carbon farming is an increasingly popular agricultural practice in Australia that promotes environmental sustainability and can offer financial benefits to farmers. By adopting methods that enhance carbon sequestration in the soil, farmers can potentially earn income through carbon credits., as well as additional economic benefits.
What is Soil Carbon Farming?
Soil carbon farming involves implementing farming techniques that increase the amount of carbon stored in the soil. The primary goal is to improve soil health, enhance productivity, capture atmospheric carbon dioxide, and reduce greenhouse gas emissions.
Earning Potential from Carbon Credits
In Australia, the income from soil carbon farming largely comes from generating and selling carbon credits under the Emissions Reduction Fund (ERF). This scheme, administered by the Clean Energy Regulator, allows farmers to earn carbon credits by adopting land management practices that increase carbon stored in soils. Each Australian Carbon Credit Unit (ACCU) represents one tonne of carbon dioxide-equivalent stored or avoided by emissions reduction activities.
Factors Affecting Income
Carbon Price: The income potential from soil carbon farming is directly tied to the price of carbon credits. As of recent trends, the price per tonne can vary significantly, influenced by market demand, government policies, and international carbon markets.
Soil Type and Management Practices: The amount of carbon that can be sequestered depends on the soil type, climate, and the specific management practices adopted. Some soils and climates are more conducive to carbon storage than others.
Project Costs and Scale: Setting up a carbon farming project involves initial costs such as baseline soil carbon measurements, method implementation, and ongoing monitoring and reporting. The scale of the project also impacts profitability, as larger areas can amortise or dilute the overhead costs per credit.
Typical Earnings
Depending on the sequestration rate and ACCU price, farmers could conservatively earn between $650 and $4300 per hectare (net) in carbon credits over the life of a project. This is not financial advice. Please read our Terms of Service for further information on our financial disclaimer.
Soil carbon farming presents a viable opportunity for Australian farmers to generate additional income while contributing to climate change mitigation. However, the exact earnings can vary based on multiple factors, including the carbon credit market dynamics and the specific practices adopted. Farmers interested in this venture should conduct thorough research and seek expert advice to understand soil carbon projects' feasibility and potential returns.