Objective 5 - Carbon Market Readiness – Financial Services

Australia’s carbon farming industry has grown steadily since the commencement of the Carbon Farming Initiative in 2011 and there is considerable potential to be exploited. However, only a very small proportion of landholders are currently engaged in carbon farming, and 80 per cent of Emission Reduction Fund (ERF) carbon reduction contracts have been land based. Whilst complimentary to traditional farming practices, carbon farming is additional to traditional streams of rural income. The contracts for ERF projects and related permanence are not fully understood by the financial services sector and ad-hoc, unfavourable valuation practices have led to a market barrier to entry and slow uptake of carbon farming. The project will work with all the key stakeholders in the carbon farming supply chain to instill guidance around valuations for carbon rights, ensure accessibility of standardised market data, enhance capacity for banks and valuers to understand the carbon farming investment opportunity, and eliminate roadblocks for producers thus increasing engagement in carbon farming.