Agricultural emissions, carbon credits in policy makers' sights

This includes the requirements of cattle traceability into the European Union for environmental tracking, the Chubb Review giving the carbon credit market the thumbs up to stay its course and then the NSW Environmental Protection Agency also announcing new policy.

This is the first climate change policy for the NSW EPA and it will create new pressure points along our supply chains that will eventually create downward pressure on emissions back to the producer.

Where the emerging carbon market has tended to provide a carrot to entice businesses to "pull down" and accrue carbon, this EPA policy, despite it working with industry stakeholders, will be tapping things along from the other end with its stick.

The EPA says it will initially be focused on more industrial sized operations that already require a licence, but when combined with emerging carbon markets and net zero targets, the need to reduce emissions along the supply chain will be felt, including back to the farmer.

With measures such as an emissions limit to be put on licenced facilities, among other potential measures yet to be agreed on and announced, this will all add downward pressure on emissions output where we previously only really had the emerging carbon market as an incentive - one that so far is still a bit of a hassle with measuring, paperwork, navigation and cost.

So it's no surprise we're being given the shuffle along, whether we like it or not, with agriculture well in the scope for both credit accrual and emissions reduction.

At a glance, two key aspects already stand out, including the mention of nitrogen oxide emissions and also what support might be necessary depending on what adjustments businesses have to make along the way.

Related: Net zero: EPA to treat emissions 'like any other pollutant'

Related: Carbon market priority for agriculture is to shore up its own supply chain requirements ahead of the big polluters

Of course, nothing is really going to change too much just yet, with the stakeholder engagement process to take 12 to 18 months before the specifics are locked down. Some of these adjustments could also be cumulative for agriculture, affecting everything from fertiliser production and use to the running of trucks transporting products (i.e. AdBlue production).

One upside may be that a cap on emissions may free up more of the carbon credits accrued for trade instead of having to be used to offset our own supply chain. Carbon credits lifted another $5 this past week to $40/ACCU.