Navigating the wild west of carbon sequestration.

With the value of Australian Carbon Credit Units (ACCU’s) predicted to increase, talk of carbon sequestration is becoming more and more frequent. But with the industry still being relatively new, lack of government regulation on carbon contracts means there’s no such thing as a standard contract and farmers are finding themselves locked into long term, lop-sided contracts.

While previously soil scientists and agronomists were the go-to for people wishing to measure their soil carbon, there’s been a shift of service providers to persons who are interested in being profitable participants in the market by gaining control of ACCU’s through carbon contracts.

At the moment, there’s a wide range of contracts being offered by carbon service providers but unfortunately, not all of them are designed to be mutually beneficial.  

Current models include agreements where the carbon service provider is paid in cash for their service as well as receiving payment via all or a percentage of the Landholders ACCU’s which the service provider then gives the landholder some income for.

But the danger with not owning your ACCU’s is multi-faceted. 

Conflicts in management interests as well as future sales of properties under carbon contracts and the inability to borrow against your own ACCU’s could all pose future issues if the service provider has control of your ACCU’s.

So what can Landholders do to ensure they’re not getting the short end of the stick in a carbon agreement?

Get involved and take control of the process. Strive to be informed about the agreements which are out there as well as retaining as much control of their ACCU’s as possible.  

Source reputable carbon service providers and keep in mind that contracts on offer are up for negotiation and landholders have the ability to steer these agreements on their terms.