What is the price of carbon in Australian Agriculture?

March 25, 2020 4:57 pm

While it’s hard to predict the outcome of the 10th Emissions Reduction Fund auction to be held at the end of March 2020, the prediction over the medium to long term is for growth in the market.  The 2019 auction resulted in an average price of AU$14.17/tonnes with spot prices in the private market trading around AU$16.50/tonnes.

The outlook for the Australian emissions has been clouded in recent times owing to recent reports that the ‘Black Summer’ bushfire event emitted up to 1.2 billion tonnes of CO2 into the atmosphere.  This is significantly greater than the 531million tonnes Australia emits annually and equates to the total annual emissions from worldwide commercial aircraft operations.

Source: Clean Energy Regulator

In response to these and other issues, we are seeing a broadening of support from the government, industry and particularly the mining and resource sector in order to meet emission reduction targets.  This presents a renewed role for investment in the agricultural sector to innovate and participate in the carbon offset market.

What are the opportunities?

Our vision for the short-term will see soil carbon sequestration projects developing across the landscape with the utilisation of regenerative practices applied in cropping, pasture and mixed agricultural systems. Farmers and land managers will see traditional barriers lifted with a framework that supports access to the carbon market, essentially providing an opportunity to diversify income and future-proof their farming operation.

The longer-term opportunities will see our agricultural communities sustain healthy food and fibre production, improved risk management (e.g. resilience to drought and fire), superior market premiums and financial returns on natural capital assets.

“Australia’s landscapes have globally significant potential as carbon sinks”

Eligible areas and potential soil carbon sequestration projects. Source: Baldock & Burgess (2017)


As momentum builds, leaders in the soil carbon field are engaging in coordinated efforts to deliver on emission reduction with soil capture and storage, a clear focus on early wins. With continued collaboration, the scene is set for gains in Soil Organic Carbon at scale within a very urgent timeframe!

“Soil carbon is a critical pathway for drawing down emissions from the atmosphere”

Australia’s landscapes have globally significant potential as carbon sinks.

There is a significant opportunity to apply regenerative agriculture techniques to transform Australia’s farm sector to sequester more carbon and sustainably supply food and fibre to the region.

In compliance markets and voluntary or private carbon markets, building carbon offset units is a direct additional revenue line.

Soil storage of carbon and water mean more drought resilience, improving farms’ long-term financial performance and asset value enhancement.

Read more on how Impact Ag Partners assists their clients in generating, measuring and monetising natural capital across their assets.

Related articles:

How carbon can not only benefit the environment but also increase your bottom line


Carbon costs – drought, fire, flooding rain

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