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Australian agriculture outlook 2024: Carbon & climate

11 December 2023 |Agricultural Outlook

Australian agriculture outlook 2024: Carbon & climate

11 December 2023 |Agricultural Outlook


There are two upcoming and important developments in the carbon farming sector: a new carbon exchange, and the new Integrated Farm Method.

A New Australian Carbon Exchange

The planned Australian Carbon Exchange (ACE) aims to increase the transparency of Australian Carbon Credit Unit (ACCU) pricing. Other objectives include reducing transaction costs, accelerating carbon abatement and simplifying trading of ACCUs.

ACE will operate in a similar way that a stock exchange does with shares. It will purchase, clear and settle ACCUs. In future, its services may include other types of carbon units administered by Clean Energy Regulator (CER) schemes.

The Exchange will integrate with a new and improved Unit Register as the first stage of the ACE project. The CER plans to launch the new Unit Register before the end of the year.  The Australian Carbon Exchange will follow about mid-year 2024. We are seeking more details of interest to farming businesses from the CER and will share these insights in future editions.

The upcoming Integrated Farm Method

For some years, there has been an aspiration to be able to carry out two carbon farming projects on one piece of land. Farm businesses could stack them, with a vegetation project above ground and a soil method project under the ground. This would expand the income available from the carbon project. It would also increase the contribution agriculture makes to the reduction of greenhouse gases. The Integrated Farm Method sets out to enable this.

The new method merges the eligible activities in a single clause. A farm business can choose among the vegetation activities and the soil carbon activities. Then it can use one or more activities from either stream. This should attract the attention of mixed farming businesses.

The new method reflects an increasing flexibility and confidence interpreting legislation. Project proponents can now advocate for a broader interpretation of terminology about activities. Approval of an activity for use is clear scientific evidence. It must confirm correlation between an activity and sequestering carbon from the atmosphere. When doing a carbon farming project, the CER awards ACCUs only for the carbon extracted from the atmosphere over their project site. And only after registration of the project. Nonetheless, there are emerging solutions which the CER is keen to encourage. Provided that the project follows the rules as well. Projects are not limited to doing only those things drawn out by the most literal reading of the documents.

One such solution gathering attention is Enhanced Rock Weathering (ERW). This technique aims to accelerate natural weathering. The natural process has been responsible for stabilising climate over geological timescales. Around the globe it captures about three per cent of current global CO2 emissions per year. The idea behind ERW is to speed up this natural process by grinding silicate rocks to powder. This increases the surface area that can react with carbon in the atmosphere. It is applied to soils, a moisture-retaining environment favourable to biochemical weathering. The processes capture carbon locking it in oceans, in sediments and in soils.  The residence time of these weathering byproducts is in the order of 100,000–1,000,000 years. This makes it a permanent carbon storage reservoir.

ERW is a promising Negative Emissions Technology (NET). Applying ground basalt to agricultural land is carried out at the same time as crop production. It does not result in competition with food production. This is in contrast to some other NETs such as afforestation. The cost of terrestrial ERW was recently estimated to be competitive to those of other NETs, such as Direct Air Carbon Capture and Storage. The carbon market is strongly interested in NETs. It pays a much higher price for carbon extracted into permanent sequestration. Research is underway in many locations to test this approach because it is so promising.

For the last two years, the Working Lands Innovation Center has been testing various soil amendments that extract carbon from the air. They have tested biochar, manure, and rock dust on farm plots. The most effective soil treatment is basalt pulverized into dust. Field tests on corn and alfalfa show increases in crop yields. It also releases other essential nutrients like phosphorous and potassium1. In some cases, yields are 30 per cent higher. Work proceeding at the Leverhulme Centre for Climate Change Mitigation in the UK yielded similar results 2.

Trials with basalt rock dust have been carried out previously including in Australia. These trials were done to test other potential benefits for agriculture, including increased cation exchange capacity, crop yields, plant nutrient concentrations and countered soil acidification. Similar to agricultural liming, ERW increases the pH of acid soils. It reduces nitrogen losses because the activity of denitrifying enzymes increases at neutral pH.

Crop yield improvement, and permanent carbon sequestration at a significant scale were observed. These opportunities look large enough to warrant investigation by farming businesses.

1 For more information visit:
2 For more information visit:


The UN recently released the Emissions Gap Report 2023 - Broken Record report to characterise the current climate condition and the gap between current commitments and their results in greenhouse gas reduction. It alerts us to the likelihood that governments will want to drive change faster if we are to stay within safe limits.

Over the past decade, there has been a disturbing acceleration in the number, speed and scale of broken climate records. So far this year 86 days have been recorded with average global temperatures exceeding 1.5°C above pre-industrial levels. In other words, in excess of 25 per cent of days this year were more than 1.5°C above 1880 average temperatures. Not only was September the hottest month ever, but global average temperatures were also a record 1.8°C above pre-industrial levels. While the records do not imply that the world has exceeded the 1.5°C temperature limit specified in the Paris Agreement as a moderately safe level, they do signal that we are getting closer.

It's not only temperature records that continue to be broken – global greenhouse gas (GHG) emissions and atmospheric concentrations of carbon dioxide (CO2) records were broken in 2022.

Global GHG emissions increased by 1.2 per cent from 2021 to 2022 to reach a new record of 57.4 gigatons of CO2 equivalent (GtCO2e). CO2 emissions from fossil fuel combustion and industrial processes were the main contributors to the overall increase. They account for two-thirds of current GHG emissions.

Emissions of methane (CH4), nitrous oxide (N2O) and fluorinated gases (F-gases) are also increasing rapidly. F-gas emissions grew by 5.5 per cent, methane by 1.8 per cent and nitrous oxide at 0.9 per cent. Together, they account for about one quarter of current GHG emissions. These are gases that have a higher impact in global warming due to their physical nature. Comparing a kilo of these gases to a kilo of carbon dioxide, methane has a warming potential of 84 for 20 years compared to carbon dioxide at a warming potential of 1. Nitrous oxide has an impact of 273 compared to carbon dioxide's 1. Small rises in these gases have big impacts. Based on early projections, global net land use, land-use change and forestry (LULUCF) CO2 emissions remained steady in 2022.

What does it mean?

The UN report looks at what is required this decade to achieve the long-term temperature goal of the Paris Agreement. Put simply, it says that we need not only to commit to more mitigation of the causes, we need to do far more. Everyone must do a lot more. The report says plainly "...unprecedented action is now needed. All countries need to share the burden of reducing emissions." or we will enter territory where climate change will be more challenging with more bushfires and worse storms.

Even in the most optimistic scenario considered in the report, the chance of limiting global warming to 1.5°C is only 14 per cent. The various scenarios leave open a large possibility that global warming will exceed 2°C or even 3°C.

A very recent study1 explored how heatwave characteristics are likely to change under 1.5°C, 2.0°C, and 3°C of global warming across Queensland’s local government areas. The research suggests:

  • Under 1.5°C of global warming, heatwaves would occur three times a year with each event lasting on average 7.5 days.
  • With global warming of 2°C, heatwaves would occur at least four times a year, on average lasting 10 days.
  • At 3°C of global warming, heatwaves would happen as often as seven times a year, with events lasting 16 days on average. That is about 33 per cent of days every year.

It’s not just about hot days or more money for air conditioning. There are already measurable impacts on agricultural productivity at around 1.2°C average temperature rise. Those impacts might be five times worse or more at 3°C.

At temperature levels that we are now entering, there are risks we will pass climate system tipping points. When we pass tipping points, global or regional climates may change stepwise from one stable state to another stable state. Wind current loops may fail, causing ocean currents to change and with that, rainfall.

Such a change would have a significant negative effect on agricultural ecosystems and natural ones. The Australian Academy of Science noted:

“At 3°C of global warming, many of Australia’s ecological systems would be unrecognisable. The decline of Australia’s natural resources would accelerate through changing distributions or loss of thousands of species and disrupted ecological processes such as habitat maintenance.”

A global review of international climate initiatives, CoP28 will take place starting 30 November. Given the risks we face, it is likely that governments will decide at CoP28 to ramp up initiatives to reduce GHG levels.

Agriculture's share of GHG emissions gets a lot of attention in the community. It is much to be hoped that the inadequate share of climate funding directed to developing responses for agriculture will finally gain the attention and support it deserves.

For more information visit:

This article is intended to provide general information on a particular subject or subjects and is not an exhaustive treatment of such subject(s). The information herein is believed to be reliable and has been obtained from public sources believed to be reliable. Rural Bank, a Division of Bendigo and Adelaide Bank Limited, ABN 11 068 049 178 AFSL/Australian Credit Licence 237879, makes no representation as to or accepts any responsibility for the accuracy or completeness of information contained in this report. Any opinions, estimates and projections in this report do not necessarily reflect the opinions of Rural Bank and are subject to change without notice. Rural Bank has no obligation to update, modify or amend this article or to otherwise notify a recipient thereof in the event that any opinion, forecast or estimate set forth therein, changes or subsequently becomes inaccurate. This article is provided for informational purposes only. The information contained in this article does not take into account your personal circumstances and should not be relied upon without consulting your legal, financial, tax or other appropriate professional.



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