Carbon Link back from the brink

The company won one of 107 contracts awarded by the Federal Government’s Emissions Reduction Fund (ERF). On Thursday, ERF held its first auction for greenhouse gas (GHG) credits, spending $660 million to purchase 47 million tonnes of GHG abatement.

Carbon Link offered about five million tonnes through aggregator Corporate Carbon, of which the ERF bought just over 3mt for a sum that will come out at about $50 million over a 10 year contract.

It was an astonishing result for a company that has been largely getting by on donated time for the past few years, yet hardly an overnight success.

Thursday’s result was eight years in the making, for three of which the company was mothballed as carbon policy became a political football.

And to earn its $50 million, Carbon Link still has to negotiate the bureaucratic minefield needed to establish an approved soil carbon sampling methodology, and become capable of proofing soil carbon levels across millions of hectares.

That last bit may include getting Civil Aviation Safety Authority (CASA) approval to import and fly a new aircraft capable of surveying at treetop height.

But after eight years of building a carbon trading platform in the face of phantasmagoric government policy, Carbon Link executive chairman Terry McCosker is delighted to be out of survival mode and into dealing with real challenges - with real money behind him.

Dr McCosker - he was awarded an Honorary Doctorate in Agribusiness by Central Queensland University earlier this year - is better known as the founder of Resource Consulting Services (RCS). He was a pioneer of cell/rotational grazing methods in Australia, and other “biological farming” practices.

When talk around the potential of the soil to sequester huge amounts of carbon was bubbling around the former Labor government’s plans to establish a cap-and-trade scheme, Dr McCosker decided to check out his belief that rotational grazing practices could sequester meaningful amounts of carbon.

An over-the-fence survey of 14 RCS clients and their neighbours in NSW and Queensland showed that across the samples, RCS clients increased soil carbon levels by an average 0.4 per cent over 10 years versus their conventional neighbours. That figure included two RCS properties “that went the other way”, Dr McCosker said.

“That equates to about 1.5 tonnes of carbon per hectare per year, which is significant. That’s when we decided to pursue this.”

Carbon Link was formed in 2006. “We started off with rose-coloured glasses,” admitted Dr McCosker.

From the start, the venture was dogged by overly-complicated policy, bureaucracy, and a series of promises made and broken by successive governments.

Most carbon companies folded in the face of this serial mismanagement. Dr McCosker said the urge to give up arose regularly, particularly in the last two years. For three years Carbon Link was mothballed while its directors waited for policy certainty.

Through most of those years, though, the company has been doggedly figuring out how to translate the erractic ecological processes that lay down soil carbon into numbers that can be plugged into an accounting system.

RCS developed a rotational grazing program on 4000 hectares near Mudgee, NSW, owned by Peabody Energy, and helped CSIRO researcher Raphael Viscarra-Rossel in the development of electronic soil-sensing technologies “hundreds of times more accurate” than existing methods.

The technology is brilliant, Dr McCosker said, but it involves driving over every hectare of land to be measured. About 3m ha was involved in Carbon Link’s offering to the ERS; clearly, driving it all isn’t an option.

Carbon Link has turned to technologies used by the mining industry. One important ingredient of the broadacre sampling method it is cooking up with CSIRO is a special aircraft capable of consistently flying at an altitude of 10m. That’s necessary for accuracy, Dr McCosker said, but the system should still be capable of measuring 800ha an hour.

The aircraft exists, but not in Australia. Carbon Link is hoping for CASA approval to import and fly one of the machines as a prototype while it establishes its methods.

A more impressive hurdle than CASA, in Dr McCosker’s mind, is the bureaucracy charged with ensuring carbon verification methodologies stand up to scientific scrutiny.

Carbon Link has submitted one soil carbon methodology, based on practice change, that was rejected by the Carbon Farming Initiative (CFI). The CFI wrote its own, which in Dr McCosker’s view is unworkable. Carbon Link is now writing version three, based on its high-capacity sampling methods.

On Thursday morning, these challenges existed for a tiny company with an unknown future. The challenges were still there on Thursday afternoon, and the company is still tiny a day later, but $50 million Commonwealth-guaranteed dollars has put a different complexion on matters.

That’s the difference between Direct Action and the concepts that preceded it, Dr McCosker said.

Like almost everyone not in government, he poured scorn on Direct Action when it was first mooted. But the program’s genius is to guarantee money ahead of the action, so companies can invest in abatement programs in the sure knowledge that the money will follow.

Carbon Link now has 18 months to get a soil carbon methodology written and approved, and measuring equipment bought, commissioned and producing results.

Dr McCosker is aiming for everything to be in place by September. That might sound like a tall order - except that after eight years of building its house on shifting sands, Carbon Link now has concrete, Commonwealth-approved foundations.

And if it succeeds, Dr McCosker thinks the company has the expertise to support more carbon-rich farming across all sectors, better results for the environment, and a new form of wealth creation in agriculture.

“Everybody wins from this,” he said.