Is tracking carbon on farm good for business?

“Respond – don’t react.”

- Eddie Vedder, Pearl Jam, Gold Coast 2024

Farmers are seeing a need to build resilience into their businesses so they can adapt and thrive into the future. It is important that farmers adopt practices and technologies that result in efficiencies, improve profitability and give farmers the ability to ‘weather the storm’ of increasingly volatile seasonal variations.

More than 140 countries, including Australia, have set, or are considering setting, a net-zero target. The Australian government has set a Net Zero 2050 Plan, which will guide our transition to the legislated target of net zero greenhouse gas emissions by 2050. 

Adoption of practices and technologies to reduce emissions and remove carbon from the atmosphere is one of the biggest barriers to achieving a lower emissions agricultural future. In order for farmers to engage, it needs to make good business sense. Linking such practices and technologies to farm efficiencies, productivity and profitability is key. It is also very achievable.

Farmers can engage via two main pathways – 1) measuring, monitoring and managing your own carbon footprint, and 2) engaging in carbon markets to trade in carbon credits like ACCUs.  There are huge opportunities for farmers to not only reduce emissions and remove carbon from the atmosphere, but also to grow productivity and build social, environmental and economic resilience.

When carbon market agreements are done properly - when farmers are informed and engaged in the process, when the service provider approaches the projects with integrity and rigour, and follow the correct process of the ‘methods’, farmers can financially benefit from carbon projects in a number of ways. This includes provision of an alternative income stream and through improvements in productivity when additional activities required under a project agreement (such as time-controlled or rotational grazing) are implemented.

Measuring and monitoring a farm’s carbon footprint can identify opportunities to make improvements and efficiencies on farm. This is particularly possible when data is collected and monitored over several years. For example, having year-on-year data on diesel, fertilizer and energy use can assist in making decisions for future purposes.

A major benefit of baselining your carbon footprint to identify your emissions intensity number is that it will also identify the areas a farm business is already doing well. A business can use this information to supply to suppliers, financial institutions or in funding applications as evidence of how they are already undertaking sustainable practices. The data is evidence of their sustainability credentials.

Often, farmers will find that they are already doing activities that reduce emissions or sequester carbon, purely because those activities are best practice and make good business sense. In baselining and understanding carbon footprint on-farm, farmers have the opportunity to prove that they are already being sustainable in their business, as well as identify areas for improvement.

Undertaking activities to sequester carbon or reduce emissions can have tradeoffs, in terms of time, productivity and cost. These trade-offs exist where the benefit gained

from reducing emissions / storing carbon does not outweigh the cost, and need to be carefully considered. Carbon agreements do not fit every business and every farm, so it is vital that farmers do their research before entering into an agreement.

Despite over 145 countries around the world having targets to meet net zero, and nearly 200 countries signing up the Paris Agreement, engagement of farmers globally and within countries varies widely. Examples include formal training (free and paid), research projects implementation and extension, incentives-based schemes, formal carbon project agreements, one-on-one consultations and informal farmer-to-farmer learning. There are pros and cons to each.

The audience for this report is the average, family-owned farm business and its advisors. It is intended to inform those who have average to good business skills but are not yet engaged in carbon farming or carbon markets.