Millions of trees are ready to go into “carbon forestry” as soon as Australia’s emissions trading legislation is completed. In July, Carbon Conscious, a part of the Australian Agricultural Contracts, signed a carbon sink forest deal with Origin Energy potentially worth up to $169 million. .Carbon Conscious also has recently completed a deal with BP to plant up to 10 million oil mallees across Australia’s wheatbelt
At the time of the carbon sink deal, it was Australia’s largest carbon forests sink project, but this may be overtaken by the announcement by South Africa’s Standard Bank, which plans to invest up to $250m into an Australian forestry fund. Standard Bank is aiming its forestry investment at “compliance clients” who don’t want to manage a forest, but who need the carbon offsets which a forest can supply. The forestry investment fund will cover the planting and management of 50,000hectares by Perth-based agribusiness investment firm Rewards Group Ltd. Forestry is a route for land managers to be able to generate tradeable carbon offsets under the current Kyoto-compliant draft of the government’s Carbon Pollution Reduction Scheme (CPRS).
According to ABARE modelling, carbon forestry would be a competitive enterprise across 26m ha of agricultural land if carbon prices climb to around $30/tonne.
At a carbon price of about A$20 per ton, which is marginally lower than the current trading rate for carbon under the European Union’s ETS, ABARE estimated that carbon forestry would be competitive across about 5.8m ha of agricultural land. Some doubts were expressed by Australian Farm Institute executive director Mick Keogh. “It’s evident that the planning and approvals process for carbon forestry is mainly at the State and local government level, and that there is no real overview of the issue.”
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