Peter & Christine Peter & Christine ForsterForster

Carbon and Farm biodiversityCarbon and Farm biodiversity plantings on the plantings on the

Bullock HillsBullock HillsAraratArarat

Bullock Hills 2003Bullock Hills 2003

Bullock Hills - 2004

Bullock Hills

Bullock Hills

Bullock Hills

Bullock Hills

200820082008

20082008

Sheep Sheltering Sheep Sheltering

Bullock HillsBullock Hills

On the Dividing Range 8 km south of AraratOn the Dividing Range 8 km south of Ararat Area 200 ha Area 200 ha Rainfall about 550 mm…may be lessRainfall about 550 mm…may be less Geology GraniteGeology Granite Soils are granite based sand and sandy Soils are granite based sand and sandy

loamloam Enterprises Cereal Cropping (very low Enterprises Cereal Cropping (very low

slopes), grazing, farm forestry, vegetation slopes), grazing, farm forestry, vegetation offsets (bush broker) and carbon offsets!offsets (bush broker) and carbon offsets!

Our PlantingsOur Plantings Mostly partnerships with Government grants Mostly partnerships with Government grants

(NHT, Envirofund, Glenelg Hopkins CMA PP’s)(NHT, Envirofund, Glenelg Hopkins CMA PP’s) Tubestock on rocks and direct seeding where Tubestock on rocks and direct seeding where

possiblepossible Local native speciesLocal native species Eucalypts - red gums, yellow box, yellow Eucalypts - red gums, yellow box, yellow

gum, manna gum, scent bark, messmate, red gum, manna gum, scent bark, messmate, red boxbox

Acacias – lightwood, black, silver, golden, Acacias – lightwood, black, silver, golden, blackwood and hedgeblackwood and hedge

Casuarinas – drooping and slaty she-oakCasuarinas – drooping and slaty she-oak Granitic soils/geology gives more species Granitic soils/geology gives more species

choice than basalt volcanic plains soil typeschoice than basalt volcanic plains soil types

Carbon Farming InitiativeCarbon Farming Initiative

Has Coalition supportHas Coalition support Is generating research that will benefit Is generating research that will benefit

agricultureagriculture Will transform how we farm and manage Will transform how we farm and manage

land, encourages innovation, nation land, encourages innovation, nation widewide

Has many forms (savannah burning, Has many forms (savannah burning, pest animal control, growing trees, pest animal control, growing trees, animal nutrition, carbon sequestration in animal nutrition, carbon sequestration in soils, methane capture and use etc)soils, methane capture and use etc)

Approved CFI MethodologiesApproved CFI Methodologies Environmental Plantings of native Environmental Plantings of native

speciesspecies Savannah burningSavannah burning Methane capture and use - piggeriesMethane capture and use - piggeries Methane capture and use – legacy Methane capture and use – legacy

waste (landfill)waste (landfill) Human induced regeneration of Human induced regeneration of

permanent even aged native forestpermanent even aged native forest Destruction of methane generated Destruction of methane generated

from dairy manure in covered from dairy manure in covered anaerobic pondsanaerobic ponds

Positive ListPositive List Approved methodologies have Approved methodologies have

activities on the positive listactivities on the positive list It is a register of abatement activities It is a register of abatement activities

eligible to earn carbon credits; egeligible to earn carbon credits; eg Recreating drained wetlandsRecreating drained wetlands Permanent plantings, reforestationPermanent plantings, reforestation Human induced regenerationHuman induced regeneration Feral animal controlFeral animal control Methane capture and useMethane capture and use Small scale farm forestrySmall scale farm forestry Protecting forestsProtecting forests

New draft regulationsNew draft regulations Activities covered by new regulations Activities covered by new regulations

are:are: feeding fats or oils to livestock that feeding fats or oils to livestock that

are pasture-grazed year-roundare pasture-grazed year-round feeding nitrate supplements to any feeding nitrate supplements to any

livestocklivestock pyrolysis of livestock manurepyrolysis of livestock manure use of selective breeding to improve use of selective breeding to improve

livestock feed use efficiency, andlivestock feed use efficiency, and increasing long rotation hardwood increasing long rotation hardwood

plantations.plantations.

Methodologies under Methodologies under consultationconsultation

Feeding dietary additives to milking Feeding dietary additives to milking cowscows

Diverting legacy waste through an Diverting legacy waste through an enclosed aerobic composting enclosed aerobic composting alternative waste treatment plantalternative waste treatment plant

Domestic Offsets Integrity Domestic Offsets Integrity CommitteeCommittee

Approve new methodologiesApprove new methodologies Methodology then approved by Methodology then approved by

Minister for Climate Change and Minister for Climate Change and Energy EfficiencyEnergy Efficiency

CFI LegislationCFI Legislation Administered by Clean Energy Administered by Clean Energy

Regulator (CER)Regulator (CER)

Clean Energy Regulator visitClean Energy Regulator visit

Mark Dreyfus inspecting the first Vic Mark Dreyfus inspecting the first Vic “environmental plantings” carbon farm“environmental plantings” carbon farm

CFI Environmental Plantings CFI Environmental Plantings RequirementsRequirements

Formerly cleared or partially cleared Formerly cleared or partially cleared for 5 yearsfor 5 years

Would not revert to forest if not Would not revert to forest if not farmedfarmed

Local native speciesLocal native species Patch size 0.2 ha or greaterPatch size 0.2 ha or greater Potential crown cover of at least 20%Potential crown cover of at least 20% Potential height of at least 2 metresPotential height of at least 2 metres

Why Carbon Farm?Why Carbon Farm? Suitable for marginal farm landSuitable for marginal farm land Low cost once establishedLow cost once established Conversely low returns compared with Conversely low returns compared with

traditional farmingtraditional farming Suits older farmers (not handling Suits older farmers (not handling

sheep)sheep) Provides other ecosystem benefitsProvides other ecosystem benefits 100 year rule protects plantings100 year rule protects plantings Once established allows for controlled Once established allows for controlled

grazinggrazing

Potential Returns and Potential Returns and Establishment CostsEstablishment Costs

Rainfall and soil type dependentRainfall and soil type dependent 4.5 tonne carbon/ha @ 4.5 tonne carbon/ha @

$22/tonne=$99/ha$22/tonne=$99/ha Traditional farming 7.5 dse/ha Wool GM Traditional farming 7.5 dse/ha Wool GM

$240/ha, prime lambs higher GM.$240/ha, prime lambs higher GM. Direct seeding is very cost effective Direct seeding is very cost effective

especially if you collect own seed. Cost especially if you collect own seed. Cost is weed control, seeder hire and some is weed control, seeder hire and some diesel. $60-80/ha. Tubestock x10.diesel. $60-80/ha. Tubestock x10.

Carbon Offsets or Carbon Carbon Offsets or Carbon CreditsCreditsmust bemust be

MeasurableMeasurable VerifiableVerifiable AdditionalAdditional PermanentPermanent The easiest and most measurable The easiest and most measurable

way of sequestering carbon is by way of sequestering carbon is by growing shrubs/trees. growing shrubs/trees.

CFI allowsCFI allows ancilliary benefits can include ancilliary benefits can include

enhancement of biodiversity, alleviation enhancement of biodiversity, alleviation of dryland salinity, reduced wind and/or of dryland salinity, reduced wind and/or water erosion and in limited water erosion and in limited circumstances shade and shelter for circumstances shade and shelter for livestock. livestock.

The methodology is designed to provide The methodology is designed to provide broad geographical coverage and be broad geographical coverage and be easily implemented at comparatively low easily implemented at comparatively low cost; consequently the methodology cost; consequently the methodology takes a conservative approach to takes a conservative approach to estimating abatement. estimating abatement.

Steps to Register for CFISteps to Register for CFI Application for Recognition as an Application for Recognition as an

Offsets Entity (ROE)- includes opening Offsets Entity (ROE)- includes opening an Australian National Registry of an Australian National Registry of Emissions Units (ANREU) account.Emissions Units (ANREU) account.

Application for an Eligible Offsets Application for an Eligible Offsets Project (EOP). Use online Reforestation Project (EOP). Use online Reforestation Modelling Tool (RMT) to map sites or Modelling Tool (RMT) to map sites or CEA’s (carbon estimation areas). CEA’s (carbon estimation areas). Create Model points and exclusion Create Model points and exclusion areas, CEA’s need to be same aspect, areas, CEA’s need to be same aspect, soil type, title. Stratification.soil type, title. Stratification.

Steps continuedSteps continued

Undertake an approved projectUndertake an approved project Submit offsets and audit reports Submit offsets and audit reports

using the RMT and an independent using the RMT and an independent accredited auditor.accredited auditor.

Apply for creditsApply for credits Credits issuedCredits issued Project closure (allows you to buy Project closure (allows you to buy

out)out)

Carbon PriceCarbon Price First trade at $22/tonne. Price set for one First trade at $22/tonne. Price set for one

more year at $24 and then likely to be more year at $24 and then likely to be international market price which is very low.international market price which is very low.

Predicted that the price will drop and then Predicted that the price will drop and then rise above $24/tonne. The greater the rise above $24/tonne. The greater the emission cuts required the higher the price is emission cuts required the higher the price is likely to be.likely to be.

EC trades set the price internationally. EC trades set the price internationally. Currently looking at increasing the priceCurrently looking at increasing the price

If impact of climate change worsens carbon If impact of climate change worsens carbon price will riseprice will rise

Moving to an ETS/CPRS may dramatically Moving to an ETS/CPRS may dramatically reduce carbon price in short termreduce carbon price in short term

Summary generated using Summary generated using online mapping toolonline mapping tool

2010 Direct Seeding2010 Direct Seeding

2012 Direct Seeding2012 Direct Seeding

Treeplanting 2012Treeplanting 2012

Human induced natural Human induced natural regenerationregeneration

Benefits of PlantingBenefits of Planting Carbon sequestrationCarbon sequestration Sheep shade and shelterSheep shade and shelter Salinity ameliorationSalinity amelioration Biodiversity improvedBiodiversity improved Subdivision effect – grazing pressureSubdivision effect – grazing pressure Microclimate createdMicroclimate created Personal amenityPersonal amenity Protecting waterways and water Protecting waterways and water

qualityquality

Soil CarbonSoil Carbon

Difficult to measureDifficult to measure May be lost with prolonged May be lost with prolonged

drought/heat/firedrought/heat/fire Government and industry Government and industry

researching this arearesearching this area Improves soil condition and water Improves soil condition and water

carrying capacitycarrying capacity

ETS VS Direct ActionETS VS Direct Action

Both major parties support CFI and CER Both major parties support CFI and CER and a 5% reduction in 2000 emissions. and a 5% reduction in 2000 emissions.

ETS caps carbon use and targets large ETS caps carbon use and targets large users who will need to buy credits from users who will need to buy credits from registered carbon offset providers. registered carbon offset providers.

Direct action (no carbon cap) purchases Direct action (no carbon cap) purchases carbon credits by tender and is paid by carbon credits by tender and is paid by taxpayers, cherry picks large users and taxpayers, cherry picks large users and offers incentives to reduce carbon use, offers incentives to reduce carbon use, invests in new technology.invests in new technology.

Direct ActionDirect Action

Carbon offsets purchasing fund will Carbon offsets purchasing fund will increase from $250 million in year 1.increase from $250 million in year 1.

Reverse auction ie buy cheapest Reverse auction ie buy cheapest carbon offsets first until available pool carbon offsets first until available pool funds exhausted.funds exhausted.

Heavy reliance on soil carbon Heavy reliance on soil carbon sequestration to achieve targets but sequestration to achieve targets but no methodology in pipeline or no methodology in pipeline or approved.approved.

WebsitesWebsites http://www.climatechange.gov.au/reducing-carbon/http://www.climatechange.gov.au/reducing-carbon/

carbon-farming-initiative/cfi-e-newscarbon-farming-initiative/cfi-e-news www.climatechange.gov.au/cfi Federal Governmentwww.climatechange.gov.au/cfi Federal Government www.carbonoffsetguide.com.au lists all traderswww.carbonoffsetguide.com.au lists all traders www.climatechange.vic.gov.au Victorian Governmentwww.climatechange.vic.gov.au Victorian Government www.maf.govt.nz/climatechange/ NZ’s emissions www.maf.govt.nz/climatechange/ NZ’s emissions

trading schemetrading scheme www.greenhouse.unimelb.edu.au/ click on www.greenhouse.unimelb.edu.au/ click on

“calculators” for a carbon toolkit for beef producers“calculators” for a carbon toolkit for beef producers www.farminstitute.org.au an online gross margins and www.farminstitute.org.au an online gross margins and

carbon calculator for various enterprise mixes is now carbon calculator for various enterprise mixes is now available – click on green box RHS of front pageavailable – click on green box RHS of front page

www.cleanenergyregulator.gov.au www.cleanenergyregulator.gov.au www.cleanenergyfuture.gov.au www.cleanenergyfuture.gov.au

Some Carbon TradersSome Carbon Traders Carbon Neutral (SA,WA,Vic)Carbon Neutral (SA,WA,Vic) Beyond NeutralBeyond Neutral Greenfleet (Most States)Greenfleet (Most States) Climate Postive (Australia)Climate Postive (Australia) CO2 Australia (NSW, Vic, WA)CO2 Australia (NSW, Vic, WA) Treesmart (Australia)Treesmart (Australia) Australian Carbon TradersAustralian Carbon Traders Greenhouse Balanced (Australia)Greenhouse Balanced (Australia) WestpacWestpac Tree Crop Technologies Pty LtdTree Crop Technologies Pty Ltd

Burning paddock prior to Burning paddock prior to seeding 2012seeding 2012

Why Carbon SmartWhy Carbon Smart Voluntary carbon market – transition to Voluntary carbon market – transition to

CPRSCPRS Only scheme for landholders to opt in with Only scheme for landholders to opt in with

plantations established prior to 2008plantations established prior to 2008 Plantations can be biodiversePlantations can be biodiverse Can trade in Voluntary and Government Can trade in Voluntary and Government

markets (choose highest price)markets (choose highest price) If price low ($10/tonne) – permits can be If price low ($10/tonne) – permits can be

banked till price liftsbanked till price lifts Backed by Landcare Australia - reputableBacked by Landcare Australia - reputable Contract transferable if property soldContract transferable if property sold 10 year contract with option to renew10 year contract with option to renew

CarbonSmart ProcessCarbonSmart Process Landholder expression of interestLandholder expression of interest Eligibility testEligibility test Preliminary offerPreliminary offer Title searchTitle search Site assessment:maps, site history, size, Site assessment:maps, site history, size,

location, habitat hectares, species, gpslocation, habitat hectares, species, gps Forest rights agreementForest rights agreement Title registrationTitle registration Carbon rights transferred to CarbonSmartCarbon rights transferred to CarbonSmart Annual paymentsAnnual payments

Landholder management Landholder management requirementsrequirements

Notify Carbon Smart of mining Notify Carbon Smart of mining explorationexploration

Prevent removal of timber (fallen timber Prevent removal of timber (fallen timber for landholder firewood ok)for landholder firewood ok)

Control pest plants and animalsControl pest plants and animals Prevent overgrazing by domestic or Prevent overgrazing by domestic or

native animalsnative animals Maintain fences and gates, tracks Maintain fences and gates, tracks Reduce fire hazardsReduce fire hazards

Some Contract DetailsSome Contract Details

Annual paymentsAnnual payments Forest Property Agreement registered on Forest Property Agreement registered on

title to ensure permanence and adequate title to ensure permanence and adequate maintenancemaintenance

Each site assessed for quality and carbon Each site assessed for quality and carbon potentialpotential

Across Australia CarbonSmart sites fix on Across Australia CarbonSmart sites fix on average 5 tonnes /ha/year CO2eaverage 5 tonnes /ha/year CO2e

Our sites on 121 ha are estimated to fix Our sites on 121 ha are estimated to fix 500 tonnes per year, at $12/tonne to 500 tonnes per year, at $12/tonne to landholder yields $6000/annumlandholder yields $6000/annum

Advantages of a CarbonSmartAdvantages of a CarbonSmart ContractContract

Diversifies farm incomeDiversifies farm income Guarantees protection of plantings – 100 Guarantees protection of plantings – 100

years – equivalent to a covenant?years – equivalent to a covenant? Finances further plantings - Stock shelter, Finances further plantings - Stock shelter,

biodiversity, erosion and salinity control biodiversity, erosion and salinity control benefitsbenefits

Plantings improve farm value – visual amenityPlantings improve farm value – visual amenity Covers catastrophic loss (pooling and 10% Covers catastrophic loss (pooling and 10%

reserve)reserve) Encourages biodiverse planting – resilienceEncourages biodiverse planting – resilience Advice on management and reveg if neededAdvice on management and reveg if needed Landholder stills owns Forestry timber rightsLandholder stills owns Forestry timber rights

Disadvantages Disadvantages Low return per ha compared with Low return per ha compared with

traditional uses?traditional uses? Lower carbon fixing rate with a biodiverse Lower carbon fixing rate with a biodiverse

planting compared with forest plantingplanting compared with forest planting Landuse is fixed for planted sitesLanduse is fixed for planted sites Legally binding Legally binding 100 year period100 year period Are their better deals?Are their better deals? Impact on land value?Impact on land value? Carbon price uncertainty until CPRS in Carbon price uncertainty until CPRS in

place place

Carbon AccountingCarbon Accounting Farm Institute has an online gross margin Farm Institute has an online gross margin

and carbon accounting tool for various and carbon accounting tool for various enterprisesenterprises

2500 Ewes, 1800 Merino Lambs, 500 2500 Ewes, 1800 Merino Lambs, 500 wethers and 500 xbd lambs, 150 ha oatswethers and 500 xbd lambs, 150 ha oats

For our farm it estimated 720 tonnes CO2 For our farm it estimated 720 tonnes CO2 equivalent (including 31 tonnes of methane)equivalent (including 31 tonnes of methane)

Of this total 662 tonnes was from the sheepOf this total 662 tonnes was from the sheep 0.22 tonne/head or 0.11/dse 0.22 tonne/head or 0.11/dse Value at $20/tonne was $14 413Value at $20/tonne was $14 413 Melbourne Uni accounting tool gave similar Melbourne Uni accounting tool gave similar

resultsresults

CarbonSmartCarbonSmart

Has a landholder web page with questions Has a landholder web page with questions and answersand answers

10 year agreement renewable10 year agreement renewable Pools carbon reducing costs and risksPools carbon reducing costs and risks Carbon rights registered to pool managerCarbon rights registered to pool manager PAYG Pay as you Grow SchemePAYG Pay as you Grow Scheme PAYS Pay as you Sow Scheme (being PAYS Pay as you Sow Scheme (being

developed)developed) Fire recovery fund to assist with revegetationFire recovery fund to assist with revegetation

GreenfleetGreenfleet

Approved abatement provider under Approved abatement provider under Greenhouse InitiativeGreenhouse Initiative

Establishes the plantationEstablishes the plantation 10 metre minimum width (prefers 10 metre minimum width (prefers

wider)wider) 10 ha10 ha >400 mm annual rainfall>400 mm annual rainfall Shares carbon after an initial amount of Shares carbon after an initial amount of

carbon sequesteredcarbon sequestered

Captains Creek - 1971

Captains Creek - 2004

Captains Creek 2010Captains Creek 2010

Denicull Creek - 1971

Sheep shelter Captains Creek

20082008

Captain’s Creek

Denicull Creek - 2004

Scar tree – Denicull Creek

Bush Broker site Denicull

Creek