Do the maths first - don't waste your farm carbon credentials

It's not only farmers who must be careful of the risks and costs in selling carbon credits generated on their land - buyers should be wary, too.

Drier, hotter, or more extreme weather events may undermine carbon sequestration projects, possibly leaving the credits worthless and soil's carbon content lower than when the landholder first signed up for a 25-year land management commitment.

Legally, the credits sales could even be clawed back by the Clean Energy Regulator.

"Unfortunately, I have had conversations with landholders who were remorseful about not stepping back and considering their options for longer," Professor Richard Eckard told a Beef Australia seminar last week.

Aside from the real risk of losing soil or vegetation carbon to droughts or bushfires and not being able to rebuild it as easily as before, he said producers were realising their own business would require supply chain recognition for its carbon management credentials.

"But you can't generate Australian Carbon Credit Units to sell to BHP and still tell your meat processor or grain buyer that you are a low carbon commodity producer," he said.

Despite Australia having one of the highest soil carbon credit registration standards, seminar speakers said the marketplace still had doubts about some earlier sequestration assumptions and the integrity of project assessments.

Governments, meanwhile, wanted businesses to take more responsibility for their own emissions, rather than buying their way out of their problem using landholders' credits.

In fact, the rush to enlist farmers to sell ACCUs to offset polluters' emissions was expected to lose momentum.

"Offsets are currently incentivising lazy behaviour by the big end of town," said Professor Eckard, from the University of Melbourne.

"I think by 2030 they will be much less accepted, or have limited value, because the game will be about reducing your own emissions, not retiring your obligation to somebody else."

He and three other research specialists in the carbon field emphasised how greenhouse emissions management knowledge and the carbon marketplace were still immature and changing fast.

That included realisation that at least 70 per cent of the recipe for generating carbon relied on adequate and reliable rainfall.

Big areas of pastoral and semi-Australia were unlikely to build soil carbon easily, or store significant carbon in trees.

The speakers urged producers to consult carefully with financial advisors, agronomists, supply chain buyers and independent government advisors to calculate what carbon advantages they may have and what may be lost if they committed to selling ACCU offsets, currently worth about $35 each.

One current financial disincentive for landholders was that Australia's government-backed credit price was one of the lowest in the world - about half the value of European credits.

Keeping, or insetting, their carbon credentials on the farm gave producers time to work out what the supply chain wanted from its suppliers in the coming years and take advantage of new research on managing soils best.

"Maintaining and growing soil carbon for yourself will give you more return than what you will get now from an ACCU," said Queensland University of Technology's Dr Beverley Henry, a 30-year veteran of soil carbon research.

"We do know soils are more advantaged and productive if they are managed to promote carbon sequestration.

"Strategies that promote carbon are good for a farm's overall bottom line productivity."

Currently the most obvious method for building soil carbon was planting legume crops and pastures and adopting low to medium level stocking rates, while prolonged grazing "will cost you".

However, there was inadequate reliable data to say which soil management methods were most effective in Australia, or how they responded to different bioregion environments and soil types.

Dr Henry cautioned that while everybody liked a good news story, upbeat claims about soil carbon were not necessarily relevant to all soils or geographies.

"If the story sounds too good, you need to look very carefully at the research results," she said.

"These projects are a 25-year commitment, but the level of information available from some sources aren't always satisfactory."

She also noted a recent report by lawyers Gilbert and Tobin for Westpac had warned that companies making statements about their carbon neutral status were found to have used carbon offsets that could not be verified for their scientific soundness.

The offsets they bought had not met the additional and permanent carbon sequestration standards expected.

"Their exposure to liability for not being transparent about their carbon credits, may, in turn, be passed back to the farmer," Dr Henry said.

Producers could also be vulnerable to a carbon scheme if its promised credits were later realised to be little more than junk value, and their market collapsed.

"Landholders will be legally required to continue maintaining their project for its 25-year life, but won't get any money for future credits."