Spanning 25 or even 100 years, a carbon farming project is a commitment for bankers as well as landowners.
While the carbon farming system might be 10 years old now, many bankers are still struggling to weigh the benefits with the risks to customers' operations and, ultimately, property valuations. In the experience of Carbon Market Institute chief executive John Connor, not all banks see it the same way.
"What we have found is substantial variance between some of the banks," Mr Connor said.
The attitudes of banks towards carbon farming is critical because carbon projects are listed on land titles and, as mortgage holders, lenders must be consulted.
Lenders learning
In response, the institute has launched a "market readiness" project educating lenders and investors.
Mr Connor also hoped some elements of the banks' contracts could be harmonised while adequately covering the risks associated with carbon farming contracts.
"Banks are trying to get some understanding about what those risks are and how to manage them," he said.
"Some of that's building up some in-house experience and they're the issues we're grappling with right now."
While Rabobank head of sustainable business development Crawford Taylor described carbon farming as a "net positive", he said bankers and producers alike needed to be better prepared.
"Knowledge is the biggest deficit at the moment around carbon farming," he said.
"To me, primary producers are undergoing a process of education towards carbon farming now, just as much the banking industry is going through a process of education."
Carbon century
When evaluating carbon farming proposals, Rabobank encouraged a clear-eyed view.
"It's a very deliberate approach and, I would say, particularly around whether our client has got a good understanding of what the agreement actually means and the risks," Mr Taylor said.
"The permanence period under some carbon projects can be 25 years up to 100 years.
"One of the things that we're increasingly asking in our discussion is, 'What are your thoughts about the way you might be farming this country, or grazing this country into the future?'."
Even a century-long project, was "not out of our thinking," Mr Taylor said.
"Let's say a farmer was planting all their gully lines or their marginal country and the project didn't interfere with their cropping runs but was incorporated into shade, shelter and fodder. You can see how that might be an easy decision to make; it gets back to what the farmer wants to achieve."
"A primary producer and or a bank needs to think ahead about how this could change the value of the farm, particularly if farming systems change."
GreenCollar chief operating officer Nerida Bradley said the long-term nature of carbon projects was gaining favour with banks.
"There is a commitment to that long-term project but the banks are really rapidly understanding that it also provides a very secure income stream over that period, which is increasingly being taken into account in valuation," she said.
Property values
Grazier and Professor of Regional Economic Development in the School of Business and Law at CQ University John Rolfe said the impact on values was not cut and dried.
"There's a positive effect and a negative effect, which is typical of most things," Prof Rolfe said.
"Most purchasers view any ongoing stream of income as a positive thing.
"It depends on the contract but the negative is that, in some cases, people may have less ability to to manage and clear their vegetation, particularly in the Mulga lands.
"Some people won't be interested if there's any further restrictions or paperwork over their vegetation management."
When a property changes hands, the entity listed as the "proponent" is all important and, while the models of engagement vary enormously, GreenCollar takes a whole-of-term interest in its carbon farming projects.
"We will work with agents and incoming purchasers," Ms Bradley said.
"These are on-title, long-term projects and are required to continue post-sale.
"You can unravel them but you have to withdraw the project through the regulator but it's certainly not something people want to do."
Regulator's rules
If the Clean Energy Regulator detects that carbon stores have been lost or are at risk, it can request information, conduct an inspection or audit a project.
If there has been a significant loss of carbon, the CER can issue a notice requiring the project proponent to relinquish or return carbon credits.
"The Clean Energy Regulator will take into account action the project proponent has taken to reduce the risk of a loss of carbon, which needs to be outlined in a permanence plan," a spokesperson said.
As a last resort, the Regulator can place a Carbon Maintenance Obligation on the land to preserve stored carbon.
"However it is worth noting that vegetation projects have been running under the Emissions Reduction Fund for more than eight years now and no Australian Carbon Credit Units have been required to be paid back as a result of the significant reversal of stored carbon and no carbon maintenance obligations have been issued," the CER spokesperson said.
Changing plans
Of course, farming practices do change over the course of 25 years or a century and John Connor said it was important that carbon farming project contracts could be adjusted accordingly.
"It does depend on the contract but, at the end of the day, whether it's the government or others, they're buying the carbon," he said.
"We're trying to make sure that the methods by which you're approved gives flexibility because we don't want micromanagement but it needs to be done in a way which continues to make sure that there's integrity there.
"That's the balance we're working with the regulators, farmers and carbon project developers to achieve."