Carbon Farming Factsheet: Farm forestry

Page last updated: Monday, 11 January 2016 - 8:30am

Please note: This content may be out of date and is currently under review.

Farmers can now claim carbon credits in the Emission Reduction Fund (ERF) for trees planted on farmland cleared prior to 1990.

Trees planted after 1 July 2010 are eligible to be claimed as carbon sinks if they are to be permanent plantings, or if they are planted to be harvested. See the attached Factsheet for more information.

Trees planted on farms can be considered for carbon credits

Description of practice

Farm forestry is the integration of forestry with other agricultural activities, such as cropping and grazing, on a farm. Tree crops are usually managed to produce harvested forest products that include sawn timber, round timbers (fence posts), reconstituted wood products (particle board and paper), sandalwood products and eucalyptus oils.

Farm forestry is now approved as a carbon sequestration method under the Sequestration methodology: Measurement based methods for new farm forestry plantations. Farmers can now obtain and sell ERF carbon credits known as Australian Carbon Credit Units (ACCUs).

Subject to conditions — including that the new forests were established on land that was cleared (i.e. not forest) at the beginning of 1990 — eligible farm forestry projects would also generate Kyoto ACCUs.

The benefit of combining the carbon and harvest revenue streams is that carbon revenues may provide the early returns before first harvest, potentially paying for establishment of the first rotation. Replanting after harvest will be required, but some revenue from the sale of harvest products may cover that.

Benefits and opportunities

Over the 25 years required for a reforestation project in the ERF, a farm forestry project can deliver carbon revenue in the early stages, then returns from sale of products once harvest commences.

Potential benefits of farm forestry include:

  • diversification of income sources
  • sustained cash flow
  • landcare and environmental benefits, such as salinity mitigation, erosion control and increased biodiversity.

Risks

  • Proximity to mills and other processing centres is important because transport costs can be prohibitive.
  • Price volatility can affect returns — especially for carbon credits.
  • The permanency requirement (i.e. the requirement to deliver on carbon sequestration over 25 years) is a long-term consideration.

Industry activity

While some farmers have planted trees purely for carbon purposes in Western Australia (WA), all plantings initiated since July 2010 could be grown for carbon credits as well as used for other forest products.

As the methodology for harvested systems has recently been approved, no plantings have been specifically initiated to claim carbon credits as well as to sell harvested products.

Some oil mallee plantings still in the planning stage could potentially be used for carbon sequestration, with the main goal being the production of biomass for electricity generation.

A sawlog production system will require management from an early stage (pruning and thinning) if the trees are to be used to generate forest products as well as carbon.

 

Contact information

Henry Brockman
+61 (0)8 9892 8435

Author

Henry Brockman