The Marshall Liberal Government's proposed new Pastoral Act will pave the way for unrealised opportunities in carbon farming of up to $84 million per year over the next 25 years, creating additional jobs and boosting regional economies, according to a report released today.
The report titled 'SA Pastoral Rangelands: Carbon Potential Report' commissioned by the Outback Communities Authority will be released at a Carbon Farming Forum in Port Augusta on Thursday.
Minister for Primary Industries and Regional Development David Basham said the report shows South Australia has missed out on carbon farming investment with only three out of more than 300 projects registered nationally.
"There exists a massive opportunity for South Australia's northern rangelands to generate carbon offsets and reduce greenhouse gas emissions as part of integrated pastoral enterprises but the current legislation is strangling investment at the cost of the environment," Minister Basham said.
"The potential for value adding carbon farming with running livestock in South Australia's pastoral lands is vast but almost virtually impossible under the current Pastoral Act. The report states there are only three projects registered with the Emission Reduction Fund in the South Australian pastoral region, compared to hundreds interstate.
"A core aim of the new Act is sustainable economic resilience for the pastoral sector, including supporting alternative land-uses and diversification opportunities such as carbon farming. The report's modelling suggests that by 2030, $28 million to $84 million a year could be earned from carbon farming projects in the SA rangelands, providing significant income diversification.
"To achieve these results, pastoralists would need to commit to maintain the carbon store for a 100 year 'permanence period', which is much longer than 42-year maximum pastoral lease terms under current legislation.
"The alternative commitment to maintain carbon for a 25-year permanence period would see pastoralists financially penalised by receiving less carbon credits than the carbon being sequestered."
Outback Communities Authority (OCA) Chair Bill McIntosh AM said growing interest and requests for information around carbon farming prompted the authority to host the forum, as well as commission the report and a series of fact sheets.
"The report shows there's some exciting opportunities for pastoralists and I think it strongly presents the case as to why we need to think about carbon farming as part of the integrated pastoral business model in this region," Mr McIntosh said.
"We wanted to use the report, fact sheets and forum as an opportunity to explore all the questions around Human Induced Regeneration. It can take several years and significant up-front costs before any profit is returned from carbon farming, so having a long-term plan and a clear understanding of your own business and the wider risks and opportunities is very important."
OCA was provided funding to undertake this project through the Commonwealth Drought Communities Program, which provided up to $1 million to eligible councils in drought affected regions to provide drought relief activities or identify local infrastructure or community resilience projects.
Key findings from the report:
- Agriculture as a sector, and in particular rangelands enterprises with their large land mass, represents a significant potential opportunity for the creation of carbon offsets to reduce emissions.
- Development of the carbon economy across the pastoral zone of Australia has accelerated dramatically over the past nine years. South Australia has been left behind.
- The largest number of HIR projects occur in Western NSW, Southern rangelands of WA and South West Qld – in total over 300 registered projects.
- There are only three HIR projects registered in the South Australian Rangelands. However, there is interest from SA pastoralists.
- Sequestration activities are subject to permanence obligations - increases in carbon must be maintained for the nominated permanence period (either 25 or 100 years) (page 23).
- The crediting period of the project is 25 years and there is a requirement to maintain the carbon for a 100-year permanence period. The alternative crediting permanence period of 25 years sees projects only receiving 75% of predicted carbon credits and thus significantly less credits than carbon sequestered (page 31).
- if just 10% of the identified rangelands was used for HIR carbon offset projects, it could generate a total potential revenue of $28 million and over 1.4 million carbon credits annually. (Modelled on price of $20/per tonne of carbon dioxide equivalent per hectare CO2e/ha, 100-year permanence)
- If 30% of the identified rangelands was used for HIR carbon offset, potential annual revenue could grow to $84 million with 4.2 million carbon credits annually (100-year permanence)
- Carbon sequestration in the landscape can be a source of employment and support for re-fuelling the post pandemic economy. (page 30)
- Without pastoralism in our rangelands, there are less employment opportunities and fewer businesses required to provide inputs and supporting services across the whole supply chain. The result being unsustainable local communities which then lose private and government services; a downward spiral that must be avoided (page 47).
- This report advocates for an approach that integrates carbon farming into existing pastoral enterprises, as one that will be central to minimising risk and fully realising the available benefits (page 5).
- An integrated pastoral and carbon business model means carbon farming should only really be considered as part of an ongoing pastoral livestock management business.
- Carbon farming should happen in tandem with pastoral businesses to better address a number of associated environmental, pest control, socio-economic and financial risks.