Environmental demands from EU export markets are driving the demand for data-driven livestock production

Whether carbon credits from grazing properties are sold to maintain polluting production in Australia, or simply held to ensure farmers meet their own supply chain expectations in the wake of climate change, one thing is certain: Proof of progress through data is king.

"It will be all about proving your footprint," said Ms Will, a beef seedstock producer who has spent 22 years in the organics space.

"With the Carbon Border Adjustment Mechanism coming into play for higher emitting industries come 2026, its impact will be felt all the way to the farm gate."

Labelled CBAM for short, the policy is designed to protect European industries, which pay a carbon tax, from those who don't.

Ms Will said EU "best practice" worked like a canary in the coal mine when it came to sniffing out trend-setting regulation.

Among millennial consumers, purchasing power rests on the claim of "sustainable".

"This is the generation who has never not-known a recycling bin. They want to see practice change that will mitigate the risk of climate disaster," she said. "For the farmer, building soil has to be a winner. We can take action under our very feet.

"EU is about best practice. It sets the tone for the rest of the world. They are the early adopters of these sort of market trends."

Producers who have bothered to maintain their EU accreditation would remember that it was created to source beef from animals that had not been dosed with anti-bacterials.

While the EU market only takes a small portion for Australia's beef production - less than 20,000t versus more than 1.6mt in total, producers who flash the EU signs at sales say they still get a premium from buyers who wish to keep cattle "in the system".

So it seems with the emerging market for carbon credits, with $1 trillion worth of corporate demand for Australian carbon credit units.

"It's amazing that this demand has taken off so much," Ms Will said.

"But landholders have to be careful because the trend is pointing to markets that want to see on-farm practice change - not farmers who just buy offsets to keep producing."

Ms Will said the outcomes of ACCC investigations into greenwashing by superannuation funds last year has clearly defined what "sustainable" means to the consumer.

In the interim, legal action has already been taken in the US against Danone and Evian water who claimed to be sustainable by buying carbon credits.

"It is clear - don't make these claims unless you are prepared to back it up. It's an interesting one legally.

"The real issue is people need to prove their emissions and prove that they are making management changes to bring an enterprise into carbon neutrality."

Proving sustainability involves being certified by an independent auditor, and the choice is broad.

"No one wants one bank. You need choice. It comes down to what resonates with the producers," Ms Will said. "But it's all about the data. You've got to prove it.

"Practice change is a no brainer if you're going to increase production and get paid to do so. Also, you'll be able to enter other markets. There's more paperwork, but the farmer is getting paid for it."

Ms Will said there was a need for robust certification.

"You can't be an abattoir and self-certify sustainable claims," she said. "The EU tariffs have made that clear."

"The border tariff mechanism has taken this debate to another level.

Feedlots will want to know the level of emissions from their grain.

"Producers need to be aware that this is coming. Be aware and let's start getting data on-farm."

European manufacturers are already paying a carbon tax and are funding their pollution through the purchase of carbon credits.

To protect local manufacturing from imports that don't pay a carbon tax, the EU has agreed to the Carbon Border Adjustment Mechanism.

By comparison, the ACCU sits at $37, up significantly from 2020 but well back from its $57 high prior to an ACCC shake-up and the initiation of the federal government's Chubb Review.

Currently the Albanese government has capped the price of an ACCU to $75 during the transition phase of serious trading, expected after an agreement with The Greens to modify the Safeguard Mechanism and allow for polluting enterprise to broker with farmers for the rights to their soil carbon.

"Almost 85pc of Australia's 2021 exports went to countries that have set net zero emissions targets.

"Farmers need to start factoring this into their business planning by finding ways of reliably measuring their footprint," Ms Will says.

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