Carbon Farming

what is carbon farming banner

Simply put carbon farming is any change to agricultural or land management practices that can reduce emissions such as nitrous oxide and methane (emissions avoidance) or store additional carbon in vegetation and soil (carbon sequestration). Increased carbon storage in soil can also improve soil health, increase the land’s resilience to a more variable climate, help enhance Australia’s natural environment and improve long-term farm productivity.

Such practice change can provide a wide range of benefits to landholders, including the opportunity to earn Australian carbon credit units (ACCUs) through the Emissions Reduction Fund (credits can be sold, so providing another income stream) – and can also provide increased profitability, production and biodiversity.

Emission Reduction Targets

Australia’s Greenhouse Gas (GHG) emissions reduction target is to reduce emissions by 26–28 per cent of 2005 levels by 2030. Australia's target is achievable with Direct Action policies that result in reduced emissions, increased energy productivity, and improved soil and environmental health.

As part of the Direct Action policies, The Emissions Reduction Fund (ERF) was launched to provide a range of business sectors including agriculture, coal, energy and transport the opportunity to earn income through emissions reductions as well as have other environmental outcomes. There are a number of opportunities for the agricultural sector to participate in the ERF by either storing carbon or avoiding emissions from agricultural activities.

What is the Emissions Reduction Fund (ERF)?

The Emissions Reduction Fund is a voluntary scheme that aims to provide incentives for a range of organisations and individuals to adopt new practices and technologies to reduce their emissions. It is enacted through the Carbon Credits (Carbon Farming Initiative) Act 2011, the Carbon Credits (Carbon Farming Initiative) Regulations 2011 and the Carbon Credits (Carbon Farming Initiative) Rule 2015.

A number of activities are eligible under the scheme and participants can earn Australian carbon credit units (ACCUs) for emissions reductions. One ACCU is earned for each tonne of carbon dioxide equivalent stored or avoided (as emissions) by a project. ACCUs can be sold to generate income, either to the government through a carbon abatement contract, or in the secondary market.

The ERF provides an opportunity for farmers and land managers to earn additional income and achieve other benefits by reducing greenhouse gas emissions or capturing and storing carbon from the atmosphere.

There are four steps to participate in the Emissions Reduction Fund – an outline can be found here: steps involved as well as information on planning a project. Click here to check your eligibility to participate.

You can set up and run your carbon farming project yourself directly with The Clean Energy Regulator (Federal Government) or with the support of one of the many private project management companies which are referred to as ‘Aggregators’. You can search for a list of Aggregators in the Australian Carbon Market Directory.

Carbon Farming Methods:

An updated list of approved methods suitable for agricultural systems can be found here. Methods include:

Soil carbon

  • Measurement of soil carbon sequestration in agricultural systems method
  • Estimating sequestration of carbon in soil using default values (model-based soil carbon)

Download a guide to ‘Understanding your soil carbon project


  • Reducing greenhouse gas emissions by feeding nitrates to beef cattle
  • Beef cattle herd management


  • Reducing greenhouse gas emissions by feeding dietary additives to milking cows
  • Animal effluent management method
  • Vegetation Methods

  • One of the land use or management change practices supported under the ERF is the establishment of permanent tree plantings under the Plantation Forestry Method.

    Examples of carbon sequestration activities include:

    • reforestation
    • revegetation
    • restoring rangelands
    • protecting native forest or vegetation that is at imminent risk of clearing

    A guide to the farm forestry ERF method can be found here.

    Tree plantings that pose a significant adverse risk to water availability, biodiversity conservation, employment, the local community or access for agricultural production are excluded.

    Due to the risks to water availability rules apply for farm forestry projects:

    • If rainfall is more than 400 mm per year, plantations can occupy an area no more than 100 hectares, or 30 per cent of a farm (whichever is the smaller)
    • If rainfall is less than 400 mm per year, plantations can occupy an area no more than 300 hectares, or 30 per cent of a farm (whichever is the smaller).
    • Exemptions can apply. The decision tree found here, indicates that projects in the Limestone Coast region may be exempt.

A map outlining currently registered carbon farming projects can be viewed here.

Research Round up

The Australian Government’s Department of Agriculture and Water Resources has put together a ‘Boosting farm productivity – improved soils and reduced greenhouse gas emissions’ report which summarises the research findings from the Carbon Farming Futures program from 2012 to 2016.

The development of this information is supported by the Limestone Coast Landscape Board, through funding from the Australian Government’s National Landcare Program