On-farm carbon credit investor demand overwhelms supply

That investment activity is also sure to drive better recognition of farming and agribusiness markets, says James Schultz, the head of Australia's largest environmental markets investment firm.

Carbon sequestration in farm soils, forestry plantings and revegetation was also opening up career opportunities in the wider agricultural service sector as carbon credit trading gained momentum - and price.

The carbon business had to be backed up by an army of scientific, agronomic and economic recruits verifying the integrity of projects and guiding landholders' projects.

"It's a challenge because there aren't a lot of people with 10 or 20 years experience in this field, but it's also a huge opportunity," said Mr Schultz, who co-founded GreenCollar 11 years ago.

His business helps property owners identify commercial carbon storage opportunities on their land, then utilise cash flow from credits generated by these projects to lift the productivity of their remaining country, too.

"I love the fact that there's a wealth of talent leaving university wanting to work in this sector."

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GreenCollar specialises in partnering with landholders and finding carbon credit buyers to monetise biodiversity and water quality initiatives.

Its partnerships number several hundred in NSW, Queensland, Northern Territory, South Australia and Western Australia, primarily in lower rainfall pastoral areas.

Environment investment players have encountered a surge in carbon credit interest from the corporate sector in the past 18 months, especially businesses in industries emitting a lot of carbon pollution.

While most farmers - indeed most people - remain perplexed, and even dubious, about what makes carbon such a hot investment topic, Mr Schultz told the Farm Writers Association of NSW demand for ecosystem services and tradable products was overwhelming the supply of credits.

Fortunately, Australia had vast areas of landscape which could be managed better to absorb carbon, and, in turn, farmers would be rewarded for their efforts, so there were plenty of supply opportunities.

"In the short term, demand for Australian Carbon Credit Units is very strong, but it's also a very illiquid market at the moment," he said.

ACCUs are issued by the federal government, with each representing a tonne of carbon dioxide equivalent stored or avoided by carbon farming sequestration projects which must be registered, actively managed and monitored by accredited specialists.

In the weeks since Labor won government promising to tighten minimum emission benchmarks as part of its pledge for a 43 per cent cut to Australian carbon emissions, local spot prices for carbon credits have jumped about 20pc.

"Six months ago nobody was expected an over-the-counter carbon price would be worth up to $40 a tonne or more," said Mr Schultz, who previously worked with the United Nations Food and Agriculture Organisation and on World Bank soil regeneration projects in Africa

The carbon market was reflecting a shift in the Australian economy.

"It's not just about one market. Everyone is awake to climate change and its impact on our lives, particularly the business costs," he said.

"Ecosystem services which reduce our climate footprint - like good farming practices - are now getting valued properly because the business community values them."

He was convinced by 2030 equity markets would see markets for carbon, biodiversity and water quality and the agricultural landscape in general in much the same way they now followed energy or technology companies.

"We're getting more and more participants, and scrutiny, too ... there's increasing pressure to respond and prove the integrity of this market," he said.

Fellow Farm Writers' speaker, Ben Stuart, said while trading carbon credits was just one tool in the box to assist Australia achieve net zero emissions, a price tag on carbon helped everybody realise what 1000 or 10 million tonnes of carbon absorbed from the atmosphere was really worth.

"A dollar value helps drive efficiencies in business and a carbon credit product has been found to be the most efficient way to do that," said Mr Stuart, a co-founder of Xpansiv, a global marketplace which prices energy, carbon and water.

Innovative farmers had proven willing to listen to what the market was saying and "give most things a go".

Australia's land resources potentially offered more chances to take advantage of carbon storage and credit sales than many densely populated regions of the world.

Mr Schultz believed the enthusiasm shown by carbon buyers was a huge opportunity to build support and financial rewards for farmland management skills and investor support in agribusiness.

"Unfortunately, many of those outside agriculture have considered it a hard sector to invest in, which is ridiculous," he said.

"Humans need food. It has to be a good investment."

Australia, fortunately, had a sophisticated farm sector with capability to evolve with new market opportunities.

Our food and fibre producers had achieved plenty of positives within their farm environments, too, but could do even better.

"We can produce any food in a way that has a beneficial environmental outcome, or we can produce in ways that have pretty negative environmental impacts," he said.

"We need to optimise the good and improve on the negatives."

His experience suggested farmers, "like the guys in western Queensland", were more informed on climate change and carbon issues than most people realised.

"Our politicians need to catch up with that level of recognition."

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