How do Farmers earn Carbon Credits?

Farmers can earn carbon credits in two ways. Firstly, by reducing emissions on their farm and secondly, by storing carbon in their soil or vegetation.

In Australia, the Commonwealth Government issues carbon credits in the form of an ACCU -an Australian Carbon Credit Unit. The Clean Energy Regulator issues one ACCU for each tonne of carbon dioxide equivalent (CO2-e) being sequestered, reduced or avoided as the result of a carbon project.

Carbon credits are generated at the end of an offset period. This is the time between two measurement events that calculate carbon sequestration. In the case of a soil carbon farming project, this measurement event takes place as soil carbon measurement.

The number of ACCUs that a soil carbon project can generate depends on a number of factors:

• the number of hectares being managed;

• the carbon price; and

• the amount of carbon that can be stored in your soil.

Also, the calculation of ACCUs takes into account farm emissions from farm activity. A project’s net carbon abatement is the amount of carbon sequestered minus the on-farm emissions. Activities such as fuel and fertiliser use, as well as methane emissions from livestock are part of on-farm emissions. These are measurements that occur above the baseline, which is established at the beginning of the project 

With the right management interventions, Carbon Sync believes it is possible to achieve increases in the total soil organic carbon. Our estimate is that a 1% increase is achievable in the top 40 centimetres of soil, over the 25-year project life. If this is achieved, the value of carbon credits could equal or exceed the value of primary production outputs. This is based on current assumptions regarding projected future carbon prices. 

There are other advantages of soil carbon farming beyond the earning of carbon credits.