Edition 01 2012
Carbon Farming Initiative case study
13.4 Highly productive land in Victoria
Environmental plantings of native tree species
Case study snapshot
•
Dairy and cattle production
•
High average rainfall
•
Fertile soils
•
Direct seeding vs tubestock planting
Acknowledgements
The Australian Government Department of Agriculture
acknowledges the work of AECOM in preparing this
case study.
This case study was produced with funding from the
Australian Government Department of Agriculture
as part of the Carbon Farming Futures Extension and
Outreach Program.
© Commonwealth of Australia
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This publication (and any material sourced from it) should be attributed as: Carbon Farming Initiative case study—environmental
plantings of native tree species: 13.4 Highly productive land in Victoria, Department of Agriculture, Canberra, 2013.
Cataloguing data
Department of Agriculture 2013, Carbon Farming Initiative case study—environmental plantings of native tree species: 13.4 Highly
productive land in Victoria, Canberra.
ISBN: 978-1-760030-18-6 (printed)
ISBN: 978-1-760030-19-3 (online)
CFI case study: 13.4
Internet
Carbon Farming Initiative case study—environmental plantings of native tree species: 13.4 Highly productive land in Victoria is available at
daff.gov.au/climatechange/resources.
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Contents
Purpose of this case study
The Carbon Farming Initiative
Australian carbon credit units
2
2
3
1 Introduction
Productive land in the Gippsland region
4
5
2 Land-use implications
7
3 Case study details and key decision points
Species selection
Planting methods
Ongoing maintenance
Determining the project area
Spatial mapping requirements
Identifying Kyoto eligible land
Estimating carbon storage
Other benefits of environmental plantings
8
8
9
10
10
11
11
11
12
4Pre-project needs
13
5 Resources and skills required
14
6Australian carbon credit units
Do you hold the rights to the carbon?
Do you have the consent of everyone else with a legal interest in the land?
What type of offsets will the project generate?
How much carbon will my project store?
15
15
15
16
16
7 Potential costs
Planting cost
Administrative costs
18
18
18
8Risk analysis
Will my project generate enough income to make it worthwhile?
How many ACCUs will I receive and when will I receive them?
What are the implications of the permanence arrangements?
Will third-party assistance be needed?
20
20
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21
21
Abbreviations
22
References
23
Department of Agriculture
Carbon Farming Initiative case study: 13.4 Highly productive land in Victoria
1
Purpose of this case study
This document is a case study of a potential offset project under the Carbon
Farming Initiative (CFI). The case study describes a potential project that could, in
principle, satisfy the requirements to be an eligible CFI project, but it is not currently
an eligible CFI project.
The purpose of this case study is to illustrate:
• the applicability of the environmental plantings methodology determination
• matters considered in determining the choice of technology, site selection, and implementing
and operating the physical characteristics of a CFI project
• the project monitoring and record-keeping requirements of the methodology determination
and the establishment of project monitoring and record-keeping systems
• the financial and non-financial costs and benefits of a potential CFI project.
You should not take action in relation to a CFI project or Australian carbon credit units (ACCUs)
purely on the basis of the scenarios presented in this document. Before you take any action, you
should get further information or advice relevant to your individual circumstances.
This case study does not claim to comprehensively cover all the above matters and does not
necessarily do so. It may use estimates, forecasts and assumptions, and these may be simplified for
the purposes of illustration. This case study also does not cover all the matters you could or should
consider in implementing a CFI project of this type.
The information in this case study is not necessarily applicable to any other case. Again, you should
obtain any appropriate professional and financial advice relevant to your individual circumstances
and not rely solely on the information in this case study.
The Carbon Farming Initiative
The CFI is an Australian Government scheme that allows farmers and other land managers to
earn ACCUs by reducing greenhouse gas emissions or storing carbon (also known as carbon
sequestration) in the landscape. These ACCUs can be sold to people and businesses wishing to
offset their emissions.
The CFI also helps rural communities and the environment by supporting sustainable farming by
creating incentives for landscape rehabilitation.
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Department of Agriculture
Carbon Farming Initiative case study: 13.4 Highly productive land in Victoria
Purpose of this case study
Participation in the CFI is voluntary; farmers and land managers can choose whether or not to
be involved.
For more information about the CFI, visit www.daff.gov.au/climatechange/cfi.
Australian carbon credit units
Subject to satisfying the monitoring, auditing, reporting and other requirements under the CFI for a
particular reporting period, an eligible CFI project can apply for ACCUs. Each ACCU represents one
tonne of carbon dioxide equivalent (CO2-e) net abatement (through either emissions reductions or
carbon sequestration) achieved by eligible activities.
From 17 May 2013, two types of ACCUs can be generated under the CFI; Kyoto and non-Kyoto
(voluntary) ACCUs1 .
Kyoto ACCUs:
• are created by Kyoto offsets projects with a reporting period that occurs from 17 May 2013 until
30 June 2020
• can be sold to companies (liable entities) to meet their obligations under the carbon
pricing mechanism
• can be sold on the voluntary market to individuals or businesses who voluntarily want to offset
their emissions.
Non-Kyoto (voluntary) ACCUs:
• are created by non-Kyoto offsets projects
• can be sold on the voluntary market to individuals or businesses who voluntarily want to offset
their emissions
• are unable to be sold to companies (liable entities) to meet their obligations under the carbon
pricing mechanism
• are unable to be exchanged for international emissions units.
The table below summarises the characteristics of each type of ACCU.
Table 1 ACCU characteristics
Characteristic
Kyoto ACCUs
Non-Kyoto (voluntary) ACCUs
Able to be sold on the voluntary market


Can be surrendered under the carbon
pricing mechanism


Any reference to a value of an ACCU in this case study should be taken as an example of a value,
which may or may not occur in the future. The Commonwealth of Australia, nor any of its officers
or related bodies, cannot make any representation or provide any guarantee concerning the future
values of non-Kyoto (voluntary) ACCUs.
An ACCU is a ‘financial product’ under the Corporations Act 2001 and the Australian Securities and
Investments Commission Act 2001. This means people who provide financial services in relation to
ACCUs and related financial products and services in Australia may require an Australian Financial
Services (AFS) licence, which authorises them to provide those services.
You should obtain your own professional advice about the trading of ACCUs, having regard to your
own situation.
For further information on the characteristics of ACCUs, please refer to the descriptions of the Clean
Energy Regulator at www.cleanenergyregulator.gov.au/ANREU/Concise-description-of-units/
Pages/default.aspx.
1
There is a third type of ACCUs called non-Kyoto (eligible) ACCUs. This type of ACCUs was only able to be generated by Kyoto eligible
projects between 1 July 2012 and 16 May 2013. These credits are the same as Kyoto ACCUs with the exception that they cannot be
exchanged for international emissions units.
Department of Agriculture
Carbon Farming Initiative case study: 13.4 Highly productive land in Victoria
3
1Introduction
This case study explores undertaking a potential CFI project using the
environmental plantings methodology determination, Carbon Farming (Quantifying
Carbon Sequestration by Permanent Environmental Plantings of Native Species using the
CFI Modelling Tool) Methodology Determination 2012.
The environmental plantings methodology determination covers the establishment and
management of permanent native forests through the planting and/or seeding of native species
on cleared or partially cleared land. This achieves greenhouse gas abatement by removing carbon
from the atmosphere and storing (sequestering) it in trees by growing a native forest.
This methodology determination can be applied Australia-wide to CFI projects that meet
requirements, such as:
• The native forests are established through direct planting or seeding; native forest regrowth
through existing natural seed banks is not eligible.
• The native forests are established on land that has been clear or partially clear of forest for the
five years before tree planting or seeding.
• The native forests consist of Australian species that are native to the local area. They may be
a mix of tree and understorey species, or one single species if the species naturally occurs as a
monoculture in the area.
• The trees have the potential to attain a crown cover of at least 20 per cent and a height of at
least 2 m.
• The project does not involve harvesting of wood products—you can remove a maximum of
10 per cent of debris per year for personal use (e.g. firewood).
• Grazing by livestock is prevented in the first three years after tree planting or seeding.
• The carbon stored in biomass (vegetation) is stored permanently for at least 100 years.
Established permanent environmental plantings may be eligible to participate in the CFI using
this methodology if they meet the above requirements and were planted on or after 1 July 2007.
Plantings established before 1 July 2007 could still be eligible if there is documentary evidence
that they were planted for the purpose of generating carbon credits. ACCUs will only be issued for
abatement from 1 July 2010.
The complete methodology is available at www.comlaw.gov.au/Details/F2012L01340.
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Department of Agriculture
Carbon Farming Initiative case study: 13.4 Highly productive land in Victoria
Introduction
Productive land in the Gippsland region
The Gippsland region is located in south-east Victoria. It extends eastwards from the edge of
metropolitan Melbourne and north to the New South Wales border (Figure 1). The region’s
high rainfall and fertile soils contribute to highly productive vegetation and is therefore highly
suitable for establishing environmental plantings under the CFI. In fact, some of the world’s
most carbon dense ecosystems—tall eucalypt-dominated forests, particularly mountain ash
(Eucalyptus regnans) forests (Keith et al. 2009)—occur in Gippsland.
The region is also a highly productive agricultural area with high agricultural production
values. There are approximately 6500 individual farms in Gippsland, most of which are dairy
or beef farms. These farms produce a combined $1.3 billion worth of agricultural produce
annually (DPI 2012). It is therefore important that Gippsland farmers interested in establishing
environmental plantings on their property consider the possible opportunity costs of taking land
out of production before embarking on a project under the CFI.
If you are a farmer or other kind of landowner living in the Gippsland region, this case study
provides important information for you about establishing environmental planting projects
that comply with the environmental plantings methodology determination. Plantings under
the environmental plantings methodology determination are best suited to areas of cleared
land that were originally covered by rainforest, forest or woodlands before the introduction of
European vegetation (see Figure 2). As environmental plantings must include ‘Australian native
species that are native to the local area of the plantings’ and must ‘have the potential to attain a
crown cover of at least 20 per cent and a height of at least 2 m’, cleared land originally covered
by heathland, shrubland and grassland is not suitable for CFI environmental plantings, as these
vegetation communities do not reach the minimum benchmarks for height and crown cover.
This case study demonstrates both the benefits that the CFI offers as well as a range of issues
and risks that need to be considered and addressed before establishing an environmental
planting project under the CFI. Information is also provided about the type of species and
planting techniques suitable to the Gippsland region, and the range of organisations that can
assist you in establishing environmental plantings.
Figure 1 Gippsland region in south-east Victoria
Data source: DPI (2012).
Department of Agriculture
Carbon Farming Initiative case study: 13.4 Highly productive land in Victoria
5
Introduction
Figure 2 Pre-European vegetation of Australia
6
Department of Agriculture
Carbon Farming Initiative case study: 13.4 Highly productive land in Victoria
2 Land-use implications
Given that the CFI requires plantings to remain in place for 100 years, it is essential
that a decision to establish a project under this scheme is part of a broader land-use
and management plan.
You will need to consider the opportunity cost of taking land out of production for environmental
plantings. Given the high productivity and value of the land in the Gippsland region, you may be
reluctant to establish environmental plantings on productive agricultural land. However, by using
the CFI Reforestation Modelling Tool (RMT) to estimate potential carbon storage from your land,
you will be better informed on the potential gains from converting productive agricultural land to
environmental plantings.
You need to carefully consider the location and configuration of environmental plantings, potential
impacts on access to watering points and impacts on important infrastructure (e.g. irrigation
pumps). Land-use benefits arising from environmental plantings include:
• altering the microclimate of the surrounding area by reducing wind and providing shade,
thereby improving conditions for stock and also reducing the loss of water through
evapotranspiration from surrounding vegetation
• helping control erosion in the wider area and improve water quality by planting along creek
lines, gullies, depressions and river banks
• improving the productivity of land by planting in the recharge areas of a landscape, which will
mitigate salinity discharge in other areas of the landscape.
You are permitted to graze a site three years after planting, provided the grazing does not prevent
natural regeneration. That is, you will be able to include the planting site in grazing rotations, and
use stock to help control herbaceous weeds.
Department of Agriculture
Carbon Farming Initiative case study: 13.4 Highly productive land in Victoria
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3Case study details and
key decision points
Farmers and other landholders looking to establish environmental planting
projects will need to ensure that they comply with the environmental plantings
methodology determination.
Species selection
Environmental planting projects must use species that are native to the local area. Species may be
either a mix of tree and understorey species, or a single species if monocultures occur naturally
in the area. Plantings must also have the potential to attain a crown cover of at least 20 per cent
and a height of at least 2 m. Considerable technical knowledge about selecting and propagating
indigenous species for environmental plantings is now available from extensive revegetation
projects across Australia during the past 15 years that have been supported by other government
initiatives such as the Natural Heritage Trust and Caring for our Country.
To determine what the native vegetation would have been before it was cleared, contact your
local government department or natural resource management organisation. The Victorian
Department of Sustainability and Environment has also produced the Biodiversity Interactive
Mapper (see http://mapshare2.dse.vic.gov.au/MapShare2EXT/imf.jsp?site=bim), which is an
online mapping tool that includes the predicted distribution of vegetation communities (referred
to as ecological vegetation classes ‘EVCs’) across Victoria before European settlement (1750 EVCs).
By referring to the benchmarks for vegetation height and overstorey cover for the EVCs present
on a site before it was cleared, you can determine whether the site meets the criteria for
environmental plantings. EVC benchmarks also contain a detailed list of constituent species that
can be used as a reference for what species may occur or have previously occurred in your area.
Consulting local species guides for your area is also recommended. These usually list plants by
locality and land system or soil type, as well as by their location in the landscape—for example,
along creeks or gullies or on dry ridge tops. Local nurseries, Greening Australia and Landcare
groups also provide good advice on what species can be readily re-established in a landscape
using revegetation techniques, and those species that are likely to be more challenging to use in
environmental plantings.
The recommended planting density for overstorey vegetation to meet the required cover
benchmarks (≥20 per cent) is shown in Table 2.
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Department of Agriculture
Carbon Farming Initiative case study: 13.4 Highly productive land in Victoria
Case study details and key decision points
Table 2 Recommended planting density required to meet the crown cover benchmark of ≥20 per cent
based on the CFI environmental plantings methodology determination
Mature crown diameter (m)
Minimum number of trees per hectare
5
102
4.5
126
4
159
3.5
208
3
283
2.5
407
2.0
637
Planting methods
Direct seeding or planting are the only methods that can be used to establish environmental
plantings. Any revegetation achieved through assisting natural regeneration by removing
grazing removal or undertaking weed control, is not included as part of the environmental
plantings methodology determination. However, these activities may be covered by other
methodology determinations.
Planting typically involves establishing tubestock material that was germinated up to 12 months
before planting in the ground. Planting can be done using either conventional garden tools
(e.g. shovels, mattocks), specialised planting equipment (e.g. Pottiputki, Hamilton Tree Planter) or
a mechanical planter (e.g. Bushplanter, Waikerie Tree Planter, Youman Tree Planter).
It is important to note that the RMT recognises only three planting densities or stocking rates
for environmental plantings: low (<800 stems/ha), medium (~1000 stems/ha) and high
(>1200 stems/ha). Planting considerably more than 1200 stems/ha will not provide a greater
income return because the maximum modelled stored carbon will be based on 1200 stems/ha.
Machines available for direct seeding all essentially have the same functions of scalping to remove
weeds, cultivating the soil bed, sowing the seed and backfilling. In situations where direct-seeding
machines cannot be sourced or are not suitable, such as on steep terrain, seed may be mixed with a
bulking agent and broadcast by hand.
You should consider the advantages and disadvantages of tubestock planting versus direct
seeding when determining which revegetation method to use (see Table 3). Generally, direct
seeding is more economical for large-scale plantings. Tubestock planting has greater success and
establishment rates, but can be more costly.
Department of Agriculture
Carbon Farming Initiative case study: 13.4 Highly productive land in Victoria
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Case study details and key decision points
Table 3 Advantages and disadvantages of tubestock plantings versus direct seeding
Planting material
Advantages
Disadvantages
Tubestock
Faster establishment rates = faster
income return
Planting is labour intensive
Greater survival rates
Greater control of planting density
Can use tree guards, which greatly assist in
controlling grazing pressure
Direct seeding
Costs involved in germinating and caring
for tubestock
Significant time required to revegetate
large areas
More expensive for larger projects
Can have lower soil disturbance
Lower total carbon storage = less income
generated over life of project
Less labour involved in establishing large areas
(10–15 km in one day)
Slow establishment rates = slower
income return
Less costs involved in revegetating large areas
Significant amount of seed required
(approximately 10× more seed than tubestock
to establish same amount of seedlings)
Seeds remain viable in the soil after planting
Cheaper for larger projects
Greater total carbon storage = greater income
generated over life of project
Low germination rates
Little control over final planting density
Tree guarding not suitable
Mixed success with groundcover species
Ongoing maintenance
Project areas will need to be continually monitored and managed to ensure the ongoing viability
of environmental plantings. In particular, the first three to five years are critically important to
the establishment of these plantings. Pay particular attention to species of plant and animal pests
in these early years. Monitoring should be used to inform whether the following maintenance
activities are required:
• pest and animal control—improve fencing, apply insecticides, install tree guards
• weed control—apply herbicide, remove manually, crash grazing if planting is older than
three years
• watering in case of drought.
Monitoring and maintenance of the project should be considered in your budget. Due to the
permanence requirements of carbon storage projects under the CFI, you need to consider the
long‑term monitoring and maintenance activities that will be needed.
Determining the project area
The first step in estimating the amount of carbon stored by the CFI project is to determine the
project area. That is, the area of land on which the trees will be planted and managed over the life
of the project. A single CFI project can be made up of a number of project areas, but each one must
be a contiguous area on a single land title.
Each project area must be divided into carbon estimation areas (CEAs) that have uniform site
characteristics (e.g. soil, aspect, position, slope) and management routines (i.e. established using
the same methods, at the same time, with the same mix of species and managed over time in the
same manner), and exclusion areas (e.g. rocky outcrops or roads where trees cannot grow).
Dividing the project area in this way is important because the rate at which plantings store carbon
differs according to the site characteristics and the management practices used, and therefore
must be modelled separately. Throughout the project, CEAs may need to be divided further if you
change management practices over time.
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Department of Agriculture
Carbon Farming Initiative case study: 13.4 Highly productive land in Victoria
Case study details and key decision points
When considering how to define the project area, it is important to remember that it will be subject
to CFI scheme obligations, such as carbon maintenance obligations. You may want to consider
including the entire land title as the project area if you want to maximise the flexibility to be able
to add to the planting area in the future—or relocate it to another part of the property—without
having to seek approval from the Clean Energy Regulator. Alternatively, you may consider it more
advantageous to define the project area as precisely as possible to limit the area of land that the
carbon maintenance obligations will apply to.
A project area may include land features such as creeks, firebreaks, tracks or access roads. As a
guide, land features less than 5 m wide do not need to be excluded if they are unlikely to affect
the calculated amount of stored carbon. Features more than 5 m in width must be defined as an
exclusion area.
Spatial mapping requirements
As part of establishing your environmental planting project and meeting your obligations under
the CFI scheme, you will need to provide geospatial mapping to identify the boundaries of your
CEAs and exclusion areas within the project areas. There are a range of approaches to determine
the boundaries of CEAs, but at a minimum you must include at least one of the following:
• field surveys and sampling
• aerial photographs
• satellite imagery
• soil, vegetation and landform maps.
You can meet the spatial mapping requirements by using the CFI Mapping Tool (CMT), which
allows you to map CEAs using a range of satellite imagery. Alternatively, you can use your digital
mapping system. Use of GPS mapping is recommended, but not required, when identifying CEA
boundary locations.
Identifying Kyoto eligible land
The CMT provides an indicative Kyoto land map to assist you to separately define Kyoto and
non‑Kyoto project areas. Note, however, that the Clean Energy Regulator will make final
determinations about the Kyoto eligibility of a project area. You may wish to pay attention to
how much of your plantings will be Kyoto compliant, as ACCUs earned from these lands are
likely to earn a greater premium in the market.
Estimating carbon storage
You must use the latest version of the RMT to calculate carbon storage. The RMT will be updated
regularly to incorporate new scientific information; therefore, you should check for updated
versions of the software for each accounting period. Revisions to the RMT software may cause
increases or decreases to the amount of stored carbon. No other calculation methodologies can
be used.
To calculate the carbon stored by the CFI project, you will need to undertake the following steps
for each CEA:
• Use the most recent version of the RMT to determine the initial carbon stock (for projects that
were established before 1 July 2010). The initial carbon stock for projects established after this
time is considered to be zero.
• Use the RMT to calculate carbon stock for the given month ending the current reporting period
(reporting periods are determined at project commencement).
• Determine the change in carbon stock since the previous report.
• Use the RMT to calculate total emissions from fire.
• Collect data about fuel used (e.g. diesel, petrol, LPG) in establishing and managing the project.
Projects should retain records of fuel use such as fuel invoices, logbooks of machinery hours
or kilometres travelled on project activities, and other records such as invoices for contract
works specifying machinery hours. If the records include fuel use on activities other than the
environmental planting, estimate the portion attributable to the project.
Department of Agriculture
Carbon Farming Initiative case study: 13.4 Highly productive land in Victoria
11
Case study details and key decision points
• Use the Reforestation Abatement Calculator (RAC) to calculate and report on the net
abatement for each CEA, and sum these values to give the total net abatement for the project.
This will be based on the outputs from the RMT and fuel usage associated with the project.
The amount of carbon stored from environmental plantings is calculated using the RMT in tonnes
of CO2-e. The RMT estimates the amount of carbon stored by environmental plantings between
reporting periods. This value is based on the estimated increase in living above and below ground
biomass and dead plant material and debris. Table 3 provides information that is included or
excluded when calculating carbon abated using the RMT. The information to be included also
needs to be documented for reporting.
Table 4 Information used to calculate carbon storage
Included
Excluded
Location of each carbon estimation area
Live and dead above and belowground biomass before planting
Initial carbon stock
Soil carbon
Fuel use (after project commencement)
Fuel use (before project commencement)
Removal of vegetation (thinning)
Removal of nonforest vegetation
Removal of firewood <10% of debris
Burning of firewood
Prescribed fire
Nursery operations (preparation and care of seedlings)
Uncontrolled fire
Fertiliser and lime use (if same or lower than under previous land use)
Emission from grazing of livestock in project area
Other benefits of environmental plantings
In addition to storing carbon, environmental plantings will provide a number of important
biodiversity benefits, including:
• improved hydrological function of the landscape
• improved water quality through reduced sedimentation
• improved soil condition
• contributing to salinity control by
ሲሲ­reducing water infiltration
ሲሲexploiting groundwater resources
ሲሲplanting species that can remove salt from the soil
• reducing wind and water erosion by
ሲሲ­buffering winds
ሲሲprotecting the soil through litter and root development
ሲሲreducing rain energy
• improving habitat for species by
ሲሲconnecting isolated patches of vegetation
ሲሲprovide food and shelter
ሲሲincreasing the range of habitat types.
Regional natural resource management bodies will be able to assist in the design of environmental
plantings to maximise the biodiversity benefits.
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Department of Agriculture
Carbon Farming Initiative case study: 13.4 Highly productive land in Victoria
4 Pre-project needs
Site preparation is crucial to the success of environmental plantings in any landscape. In particular,
there are problems with water logging and salinity in certain parts of Gippsland that need to be
addressed before planting. Common method for increasing planting success in saline and
waterlogged areas is raising the soil bed to reduce exposure to water logging and salinity. This
method is successfully used in the M-mouldboard ploughing technique, and in the M-profile
mounding technique, which also channels water and salt away from the planting area. Both
techniques also have the added advantage of scalping away weeds during ploughing, and creating
a soil bed that can be planted straight into.
On steep slopes where erosion may be an issue, bulldozing may be used to terrace the hill to
control water runoff and prevent plantings or seeds being washed away. This technique must be
thoroughly investigated because it causes significant disturbance, requires specialised machinery,
and should only be used where direct seeding cannot occur.
Ripping soils improves the success for tubestock plantings by aerating soils, and increasing water
infiltration and root penetration.
It is important to remember that the environmental plantings methodology determination
stipulates that in areas receiving more than 800 mm annual rainfall, significant soil disturbance
(such as ploughing) cannot exceed 10 per cent of the planting area because of the risk of significant
loss of carbon from the soil. Given the necessity for ploughing and other soil disturbance to
improve the chance of planting success, environmental plantings in areas receiving more than
800 mm annual rainfall will need to reduce planting density to avoid exceeding 10 per cent soil
disturbance. Alternatively, you could use planting techniques that restrict soil disturbance to the
planting area, but still address salinity and water logging issues.
It is important to note that each state and territory has its own legislative framework that
regulates the clearing of vegetation, defines what is considered ‘native vegetation’ and outlines
what activities require a permit to clear. As such, it is likely that all remnant native vegetation,
including isolated trees, will need to be incorporated into the planting designs. This will improve
the biodiversity benefits of environmental plantings.
If weeds are likely to be a problem, the area should be sprayed and/or scalped before planting.
However, if using mouldboard ploughing or M-profile ploughing, weed removal preplanting is
already taken care of.
The CFI also requires that you have obtained the necessary state water, planning and environmental
approvals, including taking account of regional natural resource management plans.
Department of Agriculture
Carbon Farming Initiative case study: 13.4 Highly productive land in Victoria
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5Resources and
skills required
The kinds of resources and skills required for an environmental planting project on
degraded agricultural land will depend largely on the scale of the project and the
planting method used.
Contractors will probably need to be engaged for mouldboard ploughing, M-profile ploughing
and direct seeding. For small-scale plantings (<1000 trees), much of the planting ca n be done by
2–4 people over two weeks on the assumption that one person can plant and guard 50–100 plants
per day.
Conventional garden tools, (e.g. mattock, shovel) are suitable for small scale tree planting.
For larger scale plantings (>1000 trees) it would be worth contracting a revegetating company,
because more technical equipment such as tree planters and direct seeders may be required. Fencing
contractors may be needed.
If you are considering doing most of the work, it is important to remember that you are likely to
require skills in animal and weed management, operating farm machinery and fencing. In addition,
you will need to be confident that you can meet the carbon accounting milestones required as part
of the environmental plantings methodology determination. The online tools have been developed
so that people with no prior experience in carbon accounting should be able to perform this task.
However, specialised skills in carbon brokering and aggregating may be required and an audit report
undertaken by a certified auditor will also need to be provided at the end of each reporting period.
Although the approved environmental plantings methodology determination is designed to provide
broad geographical coverage and be easily implemented at comparatively low cost, you may decide
that you need additional skills and expertise to successfully participate in the CFI. It is also important
to remember that the necessary skill sets may not be available in some areas and locations.
The Australian Government has provided online tools and resources for you to determine eligibility,
project areas and carbon estimation. However, you can engage a consultant or aggregator to help
you prepare documentation for a Declaration of Eligible Offsets Project.
You may also require reforestation specialists to help you select appropriate local species, and
give you advice on how to grow and care for the plants so that they meet the height and cover
requirements of the CFI regulations for environmental plantings.
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The online tools and reporting systems are publicly available and designed to be used by
landholders. You will need access to a computer and the internet, and may consider seeking
assistance from someone familiar with the CFI’s supporting tools during the initial stages of
the project.
Department of Agriculture
Carbon Farming Initiative case study: 13.4 Highly productive land in Victoria
6Australian carbon
credit units
Do you hold the rights to the carbon?
When thinking about whether to participate in an environmental planting project under the CFI,
you will need to consider whether you can demonstrate that you hold the ‘carbon sequestration
right’ for the project area. For the purposes of the CFI, a carbon sequestration right is the exclusive
legal right to obtain the benefit of sequestration of carbon in the relevant vegetation or soil carbon
pool on the relevant land.
The arrangements for creating and recognising carbon sequestration rights vary across Australia,
and these rights may be separate from land ownership. On freehold land, the situation is usually
straightforward, with the carbon sequestration right generally held by the landowner unless a
separate carbon property right has been registered and sold to someone else. For pastoral and
other types of leases, whether or not the lessee has exclusive rights to the carbon will depend on the
conditions of their lease.
Where the project area covers Crown land, such as leasehold land, the Carbon Credits (Carbon
Farming Initiative) Act 2011 requires that you obtain certification from the responsible
minister that you hold the carbon sequestration right and permission to undertake a carbon
sequestration project.
Other issues that need to be considered with leasehold land—particularly pastoral leases—are
how many years are left on the lease, and the willingness of others to take on the obligations that go
with the land. In certain jurisdictions there is also some uncertainty about whether environmental
plantings are considered ‘permissible activities’ that are consistent with the pastoral purpose of
the lease.
Do you have the consent of everyone else with a legal interest in
the land?
In addition to holding the carbon sequestration right, you will also need to make sure that you have
the consent of all persons who have an interest in land on which the project will occur. Examples
include registered interests, mortgagees, easement holders, owners of leased land and holders
of a mining lease. If the project is on Crown land, you may need the consent of the relevant state
government minister (see above). If there is a native title determination with respect to the land,
you will need to obtain consent from the registered native title body corporate.
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Carbon Farming Initiative case study: 13.4 Highly productive land in Victoria
15
Australian carbon credit units
As with the holder of the carbon sequestration right, an obligation to maintain carbon may also
affect these other interest holders; therefore, it is important they too are made fully aware of the
scheme requirements and obligations.
What type of offsets will the project generate?
The CFI provides two classes of ACCUs to differentiate between activities that count towards
Australia’s Kyoto obligations (Kyoto ACCUs) and those that do not (non-Kyoto (voluntary) ACCUs).
Environmental planting projects under the CFI can generate both types of ACCUs, depending on
whether the plantings are established on land that was cleared before 1990 (Kyoto-compliant
land) or on land that was cleared during or after 1990 (non-Kyoto compliant land). You will need
to determine the type of offsets that the project is likely to generate and the potential price and
demand differences for them. It is also possible that a single CFI project could generate Kyoto
ACCUs and non-Kyoto ACCUs. The type of ACCUs will influence who will buy them and how much
they will pay for them. Generally, Kyoto ACCUs are expected to have a higher value than non-Kyoto
(voluntary) ACCUs.
How much carbon will my project store?
Figure 3 shows the estimated amount of carbon that can be stored from a hypothetical
environmental planting project on land in Gippsland. The graph shows that over the life of
the project the total amount of stored carbon is approximately the same regardless of the
planting technique used (direct seeding, >1200 stems/ha, ~1000 stems/ha or < 800 stems/ha).
Approximately 200 t of carbon are stored per hectare of environmental plantings. For a 10-ha
environmental planting, this means you could expect about 2000 t of carbon to be stored over the
life of the project. However, Figure 4 shows that the rate of carbon storage reaches a peak about
10 years after the plantings are established.
Figure 3 RMT estimate of total stored carbon over the life of a hypothetical environmental planting on
land in the Gippsland region
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Department of Agriculture
Carbon Farming Initiative case study: 13.4 Highly productive land in Victoria
Australian carbon credit units
Figure 4 RMT estimate of the rate of stored carbon over the life of a hypothetical environmental
planting on land in the Gippsland region
Each tonne of stored carbon will generate one ACCU (minus 5 per cent to cover the risk of reversal
buffer). The value of the ACCUs will depend on a number of factors, including level of demand.
The potential price a project could receive is something that needs to be considered when deciding
to undertake a project.
Department of Agriculture
Carbon Farming Initiative case study: 13.4 Highly productive land in Victoria
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7 Potential costs
Planting cost
The costs of establishing an environmental plantings project include site preparation (e.g.
ripping and mounding), weed and pest management, purchase of tubestock or seeds, fertiliser
application, fencing and the labour required for planting. Although these costs will vary from site
to site, as a general estimate they can range from $1000 per hectare for low-cost direct seeding
to $3000 per hectare for a planting method that involves ripping and mounding of soil, planting
of tubestock and fencing.
Reforestation costs will vary significantly between sites depending on the characteristics of the site
and size of the project. However, based on a comprehensive review of typical revegetation costs
(Schirmer & Field 2000) the following rules generally apply:
• Fencing, seedlings and labour are the most expensive component of reforestation.
• Tree guards, if used, are a significant portion of the total costs.
• The cost of fencing, site preparation (ripping, mounding), spraying and direct seeding reduces
on a per hectare basis for larger projects.
• Transport costs are greater for reforestation projects in remote regions.
• Moist temperate regions with hot summers are more expensive to revegetate because of the
special techniques required.
• Direct seeding is generally cheaper than tubestock planting.
• Significant savings in seedling costs can be made by making large orders in advance.
Administrative costs
There are likely to be a range of administrative and transaction costs associated with every step
of setting up a project. Some may be one-off and others ongoing. It may be possible to rationalise
some of these costs by using the services of a carbon aggregator.
At this stage there are no costs associated with registering a CFI project with the Clean Energy
Regulator. Other costs may include:
• cost of engaging a registered greenhouse gas and energy auditor to prepare an audit report,
which must accompany most project reports during the crediting period.
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Department of Agriculture
Carbon Farming Initiative case study: 13.4 Highly productive land in Victoria
Potential costs
How can I reduce the costs involved?
In many cases, larger projects (i.e. greater areas of land covered by a planting project) are likely to
make more sense than smaller projects given the relatively significant capital costs to establish an
environmental planting project and ongoing costs to maintain the project. Some costs, such as seed
and tubestock, are directly proportional to the number of hectares being planted, while others,
such as registration and other administrative costs, have a large fixed component. Larger projects
will enable these fixed costs to be spread across a reasonable area.
For smaller scale project, engaging a project aggregator may reduce these fixed costs. Project
aggregators pool multiple projects and handle some or all of the project management and
reporting requirements. In certain circumstances this arrangement may make an otherwise
unviable project viable.
For environmental planting projects, you may be able to claim a deduction for the expenses of
establishing the trees. Detailed information about the tax deduction for carbon sink forests is
available from the Australian Taxation Office website.
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Carbon Farming Initiative case study: 13.4 Highly productive land in Victoria
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8 Risk analysis
Although CFI projects provide you with the opportunity to generate an additional
income stream from selling ACCUs, there are a number of potential risks and key
factors on which project viability depends. Some of these are discussed below.
Will my project generate enough income to make it worthwhile?
The answer to this question will depend on why you are considering the project in the first place.
If the main driver for your involvement in the CFI is to generate income and make a profit from
carbon farming then the most important consideration will be whether it makes sense from an
economic point of view. You will need to weigh up the income that you may be able to generate
from the sale of ACCUs against the costs of setting the project up (including establishment,
administrative and reporting costs), and the opportunity cost associated with the previous use of
the land (i.e. the income you could have made from agricultural activities). Although you are not
required to take the land completely out of production forever, you will need to prevent grazing by
livestock in the first three years.
The amount of revenue that can be generated from Kyoto ACCUs will depend on their value.
The value of ACCUs will depend on a number of factors, including level of demand. The potential
price a project could receive is something that needs to be considered when deciding to undertake
a project.
How many ACCUs will I receive and when will I receive them?
You will need to consider the impact of the crediting and reporting periods on your cash flow and
ability to fund the ongoing management of the project. The crediting period is the length of time
that the project is guaranteed to receive ACCUs, if the activity remains on the positive list beyond
this period than the project owner can apply for a subsequent crediting period. For environmental
plantings the crediting period is 15 years. To receive ACCUs, you need to submit a report. Under
the CFI, you are able to choose when to report on the project, as long as the reporting period is not
shorter than 12 months or longer than five years. The amount of ACCUs you receive will be the total
abatement from the project (in CO2-e) since the previous reporting period less the risk of reversal
buffer (5 per cent).
A risk of reversal buffer of 5 per cent of the carbon stored by the project is applied to all carbon
storage projects. This means that for every 100 t of carbon stored by a project, only 95 ACCUs will
be issued. The remaining 5 per cent will insure the entire scheme against short term losses due
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Department of Agriculture
Carbon Farming Initiative case study: 13.4 Highly productive land in Victoria
Risk analysis
to natural disturbance. The risk of reversal buffer ensures that individual projects affected by
disturbance events do not have to return ACCUs for the lost carbon. Instead the project owner is
required to take reasonable steps to restore lost carbon and will not be able to earn further ACCUs
until the carbon lost since the last reported level is restored.
You will also need to take into account the emissions from fuel used to establish and manage the
environmental plantings. For example, you may use machinery to prepare the site before planting.
By reducing the amount of amount of emissions from the machinery, you could maximise the
ACCUs that you receive.
The reporting flexibility under the CFI also means that you can decide when it is most cost
effective to submit a report and claim the carbon credits. Since environmental planting projects
store relatively small amounts of carbon in the first years following their establishment, you may
consider delaying your first report until five years after planting, but then report annually while
the trees are at their maximum growth phase. This is illustrated further in Figure 3.
What are the implications of the permanence arrangements?
The permanence arrangements for the CFI have been designed to ensure that carbon stored by CFI
projects is maintained for at least 100 years, while being flexible to allow change in land use in the
future. You will need to weigh up the risks and benefits involved in a multi-generational commitment.
This means that if carbon is lost through natural disturbance (e.g. bushfire, drought, disease),
action to manage fire (e.g. establishing a firebreak) or vandalism, you will not have to return
the ACCUs. However, you will need to take reasonable action to ensure that carbon stores are
re‑established. In many cases, carbon stores may recover naturally after drought or bushfire
without much intervention, however, depending on the scale of the damage you may need to
re‑establish plantings. The costs of re-establishing the plantings following disturbance should be
factored into your initial business case to determine its effect on profit.
It is also important to understand that you will not be able to receive any ACCUs while the carbon
stores are recovering. The risk buffer will not insure you against the potential loss of income
following a disturbance or for the costs of re-establishing carbon stores. To manage these risks,
you may want to consider other mechanisms such as private insurance, or carbon pooling
and diversification.
Under the permanence arrangements, you do not need to enter into a contract with the Australian
Government that commits you to maintain carbon for 100 years. In fact, you can choose to cancel
the project at any time (e.g. because you want to sell the land without the project or use the land
for something else) by handing back ACCUs to the Clean Energy Regulator. However, unless you
have ‘banked’ ACCUs or can use ACCUs from another project, you will need to purchase them at
the prevailing market price. If ACCUs are purchased, there is a risk that you will be buying them at
price higher than what you initially paid.
Will third-party assistance be needed?
Although the environmental plantings methodology determination has been designed to be easily
implemented, you may find that you need the services of a third party to help you—such as a
consultant, carbon broker or aggregator—particularly if you think you may lack the administrative
skills and capacity to undertake the necessary carbon accounting and reporting. The costs
of these services may be significantly higher in remote areas owing to the costs of travel and
local monopolies.
For smaller areas it may be useful to engage a carbon aggregator as they are able to ‘pool’ smaller
projects. The use of an aggregator may help you to reduce some of your transaction costs. Based
on experience in markets overseas, you are likely to have the choice of aggregation services from
your farmers’ association, natural resource management bodies such as catchment management
authorities, agents or agronomy services, and dedicated aggregation services.
Department of Agriculture
Carbon Farming Initiative case study: 13.4 Highly productive land in Victoria
21
Abbreviations
ACCU
Australian carbon credit units
CEA
carbon estimation area
CFI
Carbon Farming Initiative
CMT
CFI Mapping Tool
CO2-e
carbon dioxide equivalent
GPS
global dioxide equivalent
LPG
liquid petroleum gas
RAC
Reforestation Abatement Calculator
RMT
CFI Reforestation Modelling Tool
Units
22
ha
hectare
km
kilometre
m
metre
mm
millimetre
t
tonne
Department of Agriculture
Carbon Farming Initiative case study: 13.4 Highly productive land in Victoria
References
References
Australian Bureau of Statistics 2009, Agricultural commodities, Australia, 2008–09, cat. No. 7121.0.
ClimateWorks Australia 2011, Low carbon growth plan for Gippsland,
www.climateworksaustralia.org/Gippsland_Low_Carbon_Growth_Plan_Report.pdf.
DPI 2012, The Gippsland region, Victorian Department of Primary Industries, www.dpi.vic.gov.au/
agriculture/investment-trade/region-overviews/gippsland.
GippsDairy 2009, Gippsland regional facts, www.gippsdairy.com.au/GippslandFacts.aspx.
Keith H, Mackey BG & Lindenmayer DB 2009, Re-evaluation of forest biomass carbon stocks
and lessons from the world’s most carbon-dense forests, Proceedings of the National Academy of
Sciences, vol. 106, no. 28, pp.11635–11640.
Schirmer J & Field J 2000, The costs of revegetation, final report to the Natural Heritage Trust,
ANU Forestry and FORTECH, Canberra.
Department of Agriculture
Carbon Farming Initiative case study: 13.4 Highly productive land in Victoria
23
Edition 01 2012
The ‘Biosphere’ Graphic Element
The biosphere is a key part of the department’s visual identity.
Individual biospheres are used to visually describe the diverse nature
of the work we do as a department, in Australia and internationally.
Department of Agriculture
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