November 2021 - WA Carbon Connections
This month:
Funding and investment aimed at carbon farming
Report predicts growth in voluntary carbon market
Some cool carbon-related links
Soil carbon project cost reductions
First, as always, a carbon price update:
Show me the money
We’ll start with the good news of several big pots of money becoming available for building carbon in soil and vegetation. We’re hoping this will be a confidence booster for any among our readers who aren’t sure they can afford to get into carbon without support.
One example is the Transforming Farming Platform, a $100 million fund made up of $50 million from the Clean Energy Finance Corporation and $50 million from overseas agricultural impact and pension funds. The fund is looking at investing in agricultural areas of Australia, New Zealand, the US, Portugal and Denmark, and says it’s targeting underperforming small to medium farming businesses.
There are also a wide range of State and Federal Government schemes being offered.
Carbon West is hearing lots about capital funds with a voracious appetite for securing a source of supply of ACCUs (i.e. registered Emissions Reduction Fund carbon projects). There are big numbers of credits needed by a big number of global and local emitters. With the current supply of ACCUs being low, we think landholders will have some great opportunities to seek up-front financial support for developing ERF carbon projects.
As always, we say: Know the value of your assets in the fast-moving carbon world. Diving into long-term agreements should be done with caution.
But we also say: Don’t wait too long to establish a baseline measurement of your existing carbon stocks. Getting paid for stored carbon will only happen once sequestration can be proven, and without a ‘ground zero’, it’s hard to prove anything. (See the ‘quote of the day’!)
Carbon West can help landholders assess their property’s carbon potential, and educate them on the who, what, and how. Order your ERF Carbon Opportunities Report today.
Shell predicting growth in voluntary carbon offset market
Shell has predicted annual global demand for voluntary carbon offsets could triple to 1.1 billion tonnes of CO2e by 2030 as its most likely of three scenarios put forward.
As a refresher, the voluntary carbon market consists of companies who choose to offset emissions voluntarily, rather than those required to under emission reduction laws, such as Australia’s safeguard mechanism (which requires company to offset their gas emission above a certain ‘cap’, a policy which ScoMo will be facing considerable pressure to strengthen, in Glasgow this week).
Shell also predicted demand from corporate groups could exceed supply in the next few years due to a lack of high-quality offsetting projects. This makes sense. Nobody wants to pay $35 a tonne to offset their emissions, only to have to offset them again if those credits aren’t considered legitimate. Helpfully for Australia, the Emission Reduction Fund’s carbon methodologies for soil and vegetation are some of the world’s most rigorous, making Australian Carbon Credit Units (ACCUs) highly credible.
Read Shell’s report here and see the scenario breakdown on page 17, and description of the ‘flight to quality’ expected on page 21.
Cool carbon-related links
Revegetation info.
Planting trees has long been on landholders’ wish lists for its many benefits: minimising wind erosion, lowering water tables, securing creek banks or re-establishing native animal habitat. Now, there could also be carbon sequestration rewards, so... if you’d like some revegetation tips The Lower Blackwood Land Conservation District Committee has some to offer. Listen to the full podcast here or a short snippet here.
Property mapping and info.
The maps offered by the WA government can be used to help landholders visualise some of the environmental characteristics of a property, including salinity, waterlogging risk, even endangered species distribution. Try it here. Search for your area in the top left and click through the tabs on the top right to see different mapping layers, keep in mind, the more layers you view, the less quickly they will load, so bear with it.
ACCU markets.
For anyone really keen to watch the carbon market, Reputex is a source of news … https://www.reputex.com. It produces a newsletter and lots of general info.
Soil carbon project costs fall as ACCU price rises
True to minister Angus Taylor’s word, given when releasing his emissions reduction ‘roadmap’ earlier this year, the cost of soil carbon measurement is coming down.
We’ve been modelling soil carbon projects since before WA had any registered projects and are pleased to now report that costs are less than we'd predicted, and are expected to keep on coming down.
With the new 2021 ERF soil carbon methodology expected to be adopted any day now, the ‘Measure-Model’ hybrid methodology offers the chance to cut costs in the latter stages of a project even further.
The latest good news is that auditing a soil carbon project will cost less than anticipated. New methods for soil sample analysis are coming to the fore, and an ever-developing bank of knowledge for how to increase soil’s capacity to hold carbon all bode well for the success of soil carbon farming.
Then when you consider the rising price of carbon credits both here in Australia and abroad, we are starting to look at an attractive equation. Input costs are reducing, and while the number of credits generated per hectare will stay the same, the price of credits is clearly rising. Past predictions might have meant a significant percentage of your credits would be lost to the costs of running a project. This percentage looks likely to reduce as carbon farming uptake increases, especially in a project’s later years.
Quote of the day:
One who learns and learns, but never acts on what they know,
Is one who ploughs and ploughs, but never takes the time to sow.
In a carbon industry context.... yes, learn as there is much to know, but without starting a project, no carbon credits will flow.