What many of us really want to know about carbon trading is if farmers can make money from it. Recent times have seen more methodologies introduced that are more suited to our farming operations, but are they profitable enough to make the paperwork involved worthwhile? The short answer is – I’m not allowed to say!
An ACCU (Australian Carbon Credit Unit)- which is the tradeable carbon unit, is considered a ‘financial product’ and one must carry an Australian Financial Services (AFS) licence to advise on this. Whilst I have carried such a licence in the past – it is no longer current, so I would be breaking the law to infer, predict or advise any likely financial gain or loss from ACCU’s.
I can however, talk about how much carbon one might be likely to sequester into the soil and you can get your own advice on the financial relationship to this carbon.
How much carbon can we sequester?
To be able to make money selling carbon, we obviously need to either sequester or abate carbon. It is the sequestering of carbon into soils that I will speak of here, as this relates to production techniques, which is more related to the focus of my blog. There are also many productivity and profitability outcomes from soil carbon on top of whatever gains one may make from trading.
Soil Organic Matter and Soil Organic Carbon
First, let’s know what we are talking about. Soil organic matter (SOM) is different to soil organic carbon (SOC). [private] Soil organic matter consists of all organic matter in the soil – “any living or dead animal and plant material. It includes living plant roots and animals, plant and animal remains at various stages of decomposition, and microorganisms and their excretions.”3 Soil organic carbon is just one component of soil organic matter. It is important to know which of these you are viewing on a soil test and what people are quoting when talking carbon.
You may find that some soil tests measure soil organic matter (SOM), but not SOC. An accepted rate to convert SOM to SOC is 1.724 (which assumes organic matter has 58% organic carbon. There are obviously variables that influence this rate and “conversion factors can be as high as 2.5, especially for subsoils”5). For this purpose however, let’s assume 1.72. So,
SOM% / 1.72 = SOC%
I have mentioned before that soil organic carbon levels in my area are 1 to 1.8%. You will see Peter commented after last week’s post that his carbon levels are around 0.6%.
But what does this soil carbon percentage mean in terms of tonnes of carbon or carbon dioxide?
It is estimated that the world’s soils have lost 50-80% of their carbon or that soil carbon levels have fallen 3% in Australia since European settlement.4
Let’s work out how many tonnes of carbon, or carbon dioxide would be in one hectare of land – assuming we had 1% SOC in our soils.
There is not a definitive amount of tonnes of carbon in 1% SOC that can be quoted for all soil types. This will be dependent on soil bulk density – which can vary from 1 to 1.8g/cm3. Let’s assume 1.4 as a mid-range for the purposes of these calculations.
The tonnes of carbon in one hectare of land can be estimated by the following:
Tonnes C per ha = SOC (%) x Soil bulk density (Mg/m3) x Sampling depth (cm)
Let’s assume a mid-range bulk density of 1.4 and a sampling depth of 10cm.
Tonnes C /ha = 1% (SOC) x 1.4Mg/m3 x 10cm.
= 14tC/ha
Due to the methods for measuring carbon in soil – any gravel fraction over 2mm in size are removed from the sample. So if there is 10% gravel in a soil, we need to adjust the calculated carbon by taking 90% of the Tonnes of Carbon /hectare. ie. 90% x 14tC/ha = 12.6tC/ha
With greater depth
At 30cm depth, with 1% SOC, the carbon tonnes per hectare would be 42tC/ha (assuming no gravel content).
The impact of compaction
Something else to consider is that if you are comparing carbon levels of soil over time. It is important to include another calculation, where the mass of soil is considered. This is because if we measure from 0-10cm of a compacted soil and then measure from 0-10cm of the same soil that has become biologically active and aerated – we may be measuring quite different quantities of soil and hence carbon. This could be changes across time or across different sites – for example a treated and untreated areas.
I won’t introduce this calculation here as I feel it may unnecessarily complicate things. It has taken me some time to get my head around the calculations and has delayed me as I have sought to represent the correct science and methods to confidently report on them. I was challenged as I couldn’t see the consistency in different calculations put forward by various organisations, but further research and talking with industry people has identified that this influence of compaction or the bulk density (mentioned here) has been the varying factor between calculations represented by one company or body and those represented elsewhere. They are used in slightly different scenarios – ie. one for purely measuring levels of soil carbon and one used for comparative soil work. The difficulty in accessing and deciphering this information however would likely prove frustrating for farmers who may want to get informed and be encouraged to become involved in carbon trading.
How much carbon can be sequestered in a year?
What rates are realistic in terms of amounts of sequestered carbon per hectare per year? It has been estimated by Carbonlink that “expected rates of sequestration applicable to Australia appear to be around 0.5 to 1 T C/ha/yr.” Obviously this will vary with management, environment and other factors.
How much carbon dioxide or tradeable ACCU’s is this?
There are 3.67tonnes of carbon dioxide equivalent or 3.67 ACCU’s in one tonne of soil carbon.1
So, when it is suggested that 0.5 to 1tC/ha/yr might be an appropriate amount to consider possible – this would equate to 1.84 to 3.67 ACCU’s/ha/yr or tradeable carbon units/ha/yr.
Australian carbon researcher Christine Jones refers to USDA research across 10 sites of “low to medium rainfall and relatively short growing season”, carbon ACCU’s equivalents of 4ACCU’s/ha/yr (to 30cm) to 10.6 ACCU’s/ha/yr (to 120cm). The same research found higher sequestration rates below 30cm, and “with virtually no biomass inputs to soil in these trials, as all aboveground material was removed for ethanol production”, Christine suggests the carbon placed into the soil from the plant sugars from actively growing roots to be the major contributor to soil carbon, rather than biomass on the soil surface.7
What is this worth to a farmer?
As I said earlier – I cannot say. The last auction round of ERF (Emissions Reduction Fund) had ACCU’s trade at around $14/ACCU – this is just past fact – not any indication at all of the future likelihood of values.
Speak to an accredited advisor about future likely returns and the financials of trading carbon – and you may like to ask the detail of the periods of payments too.
Last Words
My intention with this blog was to help you understand what a % soil organic carbon reading from a soil test means in terms of tonnes of carbon and carbon dioxide equivalents. I hope that it has helped in this regard and for indicating potential carbon sequestration amounts.
As I have said to you on previous occasions, regardless of your thoughts on carbon as a tradeable asset in your farm business, it remains a key driver of your farms profitability and resilience to seasonal climatic conditions. The more practices that we can employ on our farms that increase our soil organic carbon levels, the better off we’ll be.
References
1. Chan, Y. (Jan. 2008) Prime Fact 735 – Increasing Soil organic Carbon of Agricultural Land. http://www.dpi.nsw.gov.au/__data/assets/pdf_file/0003/210756/Increasing-soil-organic-carbon.pdf
2. Jones, C. (2007) Australian Soil Carbon Accreditation Scheme. Katanning Workshop. http://www.amazingcarbon.com/JONES%20-%20Soil%20Credits.pdf 23rd June 2015.
3. Lines-Kelly, R. (Aug 2014) Soil Organic Matter. NSW DPI. http://www.dpi.nsw.gov.au/agriculture/resources/soils/structure/organic-matter 25th June 2015.
4&5. Pluske, W., Murphy, D. & Sheppard, J. (2015) Fact Sheets – Total Organic Carbon. http://www.dpi.nsw.gov.au/agriculture/resources/soils/structure/organic-matter 25th June 2015.
6. Where Does Soil Carbon Currently Stand in Relation to Helping Meet Australia’s 2020 Target? (Nov 2014) http://carbonlink.com.au/wp-content/uploads/Soil-Carbon-Summary-Nov-2014.pdf25th June 2015, Carbon Link.
7. Jones,C. (2010) Soil Carbon – Can it save Australia’s Bacon? http://www.amazingcarbon.com/PDF/JONES-SoilCarbon&Agriculture(18May10).pdf 29th June 2015.