carbon farming initiative case study 13.8 beef grazing in north-east

Edition 01 2012

Case study snapshot

• Beef grazing property

• 500–900 mm average rainfall per annum

• Fertile loams to granitic sandy soils

• Seedling plantings

Carbon Farming Initiative case study13.8 Beef grazing in north-east VictoriaEnvironmental plantings of native tree species

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Department of Agriculture 2013, Carbon Farming Initiative case study—environmental plantings of native tree species: 13.8 Beef grazing in north-east Victoria, Canberra.

ISBN: 978-1-760030-29-2 (printed)

ISBN: 978-1-760030-30-8 (online)

CFI case study: 13.8

Internet

Carbon Farming Initiative case study—environmental plantings of native tree species: 13.8 Beef grazing in north-east Victoria is available at daff.gov.au/climatechange/resources.

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AcknowledgementsThe Department of Agriculture acknowledges the work of URS Australia Pty Ltd in preparing this case study.

This case study was produced with funding from the Australian Government Department of Agriculture as part of the Carbon Farming Futures Extension and Outreach Program.

1Department of AgricultureCarbon Farming Initiative case study: 13.8 Beef grazing in north-east Victoria

Purpose of this case study 2

The Carbon Farming Initiative 2

Australian carbon credit units 3

1 Introduction 4

Environmental plantings on small beef farms 5

2 Land-use implications 7

3 Case study details and key decision points 9

Small, beef farm CFI project 9

Planning approvals 12

Calculating carbon—what is measured 12

Baseline calculations 13

Data collection 13

Tools 14

Benefits 14

4 Pre-project needs 16

Site preparation 16

Fencing 16

Pests, weeds and pathogens 17

Environmental asset protection 17

5 Resources and skills required 19

Practical skills 19

More specialised skills 19

6 Australian carbon credit units 20

Rates of carbon storage and ACCU generation 20

7 Potential costs 22

Project setup costs 22

Variable and direct costs 22

8 Risk analysis 23

Early mortality risk 23

Competition threat of pastures 23

Crash grazing 24

Tree guards 24

Fire 24

Climate 24

Land subdivision 25

Summary 25

Abbreviations 26

Contents

2 Department of AgricultureCarbon Farming Initiative case study: 13.8 Beef grazing in north-east Victoria

Purpose of this case study

This document is a case study of a potential offset project under the Carbon Farming Initiative (CFI). The case study describes a potential project that could, in principle, satisfy the requirements to be an eligible CFI project, but it is not currently an eligible CFI project. The purpose of this case study is to illustrate:• the applicability of the environmental plantings methodology determination• matters considered in determining the choice of technology, site selection, and implementing

and operating the physical characteristics of a CFI project• the project monitoring and record-keeping requirements of the methodology determination

and the establishment of project monitoring and record-keeping systems• the financial and non-financial costs and benefits of a potential CFI project.

You should not take action in relation to a CFI project or Australian carbon credit units (ACCUs) purely on the basis of the scenarios presented in this document. Before you take any action, you should get further information or advice relevant to your individual circumstances.

This case study does not claim to comprehensively cover all the above matters and does not necessarily do so. It may use estimates, forecasts and assumptions, and these may be simplified for the purposes of illustration. This case study also does not cover all the matters you could or should consider in implementing a CFI project of this type.

The information in this case study is not necessarily applicable to any other case. Again, you should obtain any appropriate professional and financial advice relevant to your individual circumstances and not rely solely on the information in this case study.

The Carbon Farming InitiativeThe CFI is an Australian Government scheme that allows farmers and other land managers to earn ACCUs by reducing greenhouse gas emissions or storing carbon (also known as carbon sequestration) in the landscape. These ACCUs can be sold to people and businesses wishing to offset their emissions.

The CFI also helps rural communities and the environment by supporting sustainable farming by creating incentives for landscape rehabilitation.


Purpose of this case study

Participation in the CFI is voluntary; farmers and land managers can choose whether or not to be involved.

For more information about the CFI, visit www.daff.gov.au/climatechange/cfi.

Australian carbon credit unitsSubject to satisfying the monitoring, auditing, reporting and other requirements under the CFI for a particular reporting period, an eligible CFI project can apply for ACCUs. Each ACCU represents one tonne of carbon dioxide equivalent (CO2-e) net abatement (through either emissions reductions or carbon sequestration) achieved by eligible activities.

From 17 May 2013, two types of ACCUs can be generated under the CFI; Kyoto and non-Kyoto (voluntary) ACCUs.1

Kyoto ACCUs:• are created by Kyoto offsets projects with a reporting period that occurs from 17 May 2013

until 30 June 2020• can be sold to companies (liable entities) to meet their obligations under the carbon

pricing mechanism• can be sold on the voluntary market to individuals or businesses who voluntarily want to offset

their emissions.

Non-Kyoto (voluntary) ACCUs:• are created by non-Kyoto offsets projects• can be sold on the voluntary market to individuals or businesses who voluntarily want to offset

their emissions• are unable to be sold to companies (liable entities) to meet their obligations under the carbon

pricing mechanism• are unable to be exchanged for international emissions units.

The table below summarises the characteristics of each type of ACCU.

Table 1 ACCU Characteristics

Characteristic Kyoto ACCUs Non-Kyoto (voluntary) ACCUs

Able to be sold on the voluntary market

Can be surrendered under the carbon

pricing mechanism

Any reference to a value of an ACCU in this case study should be taken as an example of a value, which may or may not occur in the future. The Commonwealth of Australia, nor any of its officers or related bodies, cannot make any representation or provide any guarantee concerning the future values of non-Kyoto (voluntary) ACCUs.

An ACCU is a ‘financial product’ under the Corporations Act 2001 and the Australian Securities and Investments Commission Act 2001. This means people who provide financial services in relation to ACCUs and related financial products and services in Australia may require an Australian Financial Services (AFS) licence, which authorises them to provide those services.

You should obtain your own professional advice about the trading of ACCUs, having regard to your own situation.

For further information on the characteristics of ACCUs, please refer to the descriptions of the Clean Energy Regulator at www.cleanenergyregulator.gov.au/ANREU/Concise-description-of-units/Pages/default.aspx.

1 There is a third type of ACCUs called non-Kyoto (eligible) ACCUs. This type of ACCUs was only able to be generated by Kyoto eligible projects between 1 July 2012 and 16 May 2013. These credits are the same as Kyoto ACCUs with the exception that they cannot be exchanged for international emissions units.


1 Introduction

This case study explores undertaking a potential CFI project using the environmental plantings methodology determination, Carbon Farming (Quantifying Carbon Sequestration by Permanent Environmental Plantings of Native Species using the CFI Modelling Tool) Methodology Determination 2012.The environmental plantings methodology determination covers the establishment and management of permanent native forests through the planting and/or seeding of native species on cleared or partially cleared land. This achieves greenhouse gas abatement by removing carbon from the atmosphere and storing (sequestering) it in trees by growing a native forest.

This methodology determination can be applied Australia-wide to CFI projects that meet requirements, such as:• The native forests are established through direct planting or seeding; native forest regrowth

through existing natural seed banks is not eligible.• The native forests are established on land that has been clear or partially clear of forest for the

five years before tree planting or seeding.• The native forests consist of Australian species that are native to the local area. They may be

a mix of tree and understorey species, or one single species if the species naturally occurs as a monoculture in the area.

• The trees have the potential to attain a crown cover of at least 20 per cent and a height of at least 2 m.

• The project does not involve harvesting of wood products—you can remove a maximum of 10 per cent of debris per year for personal use (e.g. firewood).

• Grazing by livestock is prevented in the first three years after tree planting or seeding.• The carbon stored in biomass (vegetation) is stored permanently for at least 100 years.

Established permanent environmental plantings may be eligible to participate in the CFI using this methodology if they meet the above requirements and were planted on or after 1 July 2007. Plantings established before 1 July 2007 could still be eligible if there is documentary evidence that they were planted for the purpose of generating carbon credits. ACCUs will only be issued for abatement from 1 July 2010.

The complete methodology is available at www.comlaw.gov.au/Details/F2012L01340.


Introduction

Environmental plantings on small beef farmsThe beef industry in north-east Victoria is a significant contributor to the Victorian beef industry, although it is characterised by small farms. The increasing number of small farms is partly due to the subdivision of large farms in response to the growing demand for ‘tree changer’ lifestyle farms in the region. Some land has been removed from agricultural production. However, some lifestyle farmers have taken up beef cattle grazing and farm smaller herds, often looking toward niche markets rather than the traditional beef markets.

This case study is based on a small beef farming property on which approximately 18 per cent of the farm area has been planted out to permanent environmental plantings using block and shelter belt plantings. The first plantings were established in 2002 with further plantings taking place up until 2012. This proportion of planting enables it to remain productive while generating environmental benefits, including the potential to earn ACCUs from the plantings post 2007. Some of the benefits of the plantings are already being observed, including better use of the land, decreased salinity, more pasture and better pasture quality. This farm has some plantings that are eligible to apply the environmental plantings methodology determination, and some that are not.

The environmental planting projects established on this farm complement and enhance the core business of beef production and could be applicable to many grazing farm systems. It is particularly suited to small beef producers who need to continue to increase the production intensity on their farm to maintain profits and a competitive edge in beef export markets.1

This case study highlights the use and improvement of three distinct land classes—rich fertile flats, less fertile rises and rocky hill crests—all within a relatively small farm without losing production potential. It illustrates how, through the establishment of permanent environmental plantings, underused, low-productivity sites can add value to the whole farm.

The farmThe farm is a weaner production system on 131 ha of undulating country with spring-fed dams located in the North East Catchment Management Authority area of Victoria. It is below the snowline of the Australian Alps, but receives heavy frosts over winter, and has hot, drying summers.

The farm has three separate land titles and is divided by a main road. The home block and fertile, low-lying country is on the south side of the road, with the southernmost boundary defined by a large, freshwater lake. The other two titles to the north of the road consist of undulating terrain. The paddocks are about 4 ha each, enabling a rotational grazing system.

The long-term average annual rainfall is approximately 700 mm but it has ranged from about 500 mm in dry years to 900 mm or more in good seasons.

The farm is generally freely draining, and there are also numerous seasonal drainage lines and a permanent creek running through the property.

The predominant soil types on the property are rich, fertile loamy soils on the flats, which are the prime production areas of the farm. In the hills the soil changes to nutrient-poor granitic sands that support native pasture. The soils are shallow on the crests of the hills and along the ridge lines.

Soil acidity has been an issue in the loamy soils. Lime has been applied to raise the acidity from pH 4 to about pH 5. Dung beetles are also used to help quickly break down the cow manure in the paddock, allowing constant, even pasture growth.

The improved pastures have a perennial base and average about 2 t of green dry matter per hectare. In the hilly areas of the farm, native, unimproved pasture persists. This provides good feed and permanent groundcover. A perennial native red grass grows on the northern aspects of the hills and native weeping grass grows predominantly on the southern sides of the hills.

The combination of improved pastures with the native pastures provides the farm with year-round fodder for the herd. Despite this, supplementary feeding is provided; particularly when the cows are calving and lactating.

1 Victorian Department of Primary Industries, Beef web pages, www.dpi.vic.gov.au/agriculture/beef-and-sheep/beef, accessed 6 June 2012.


Introduction

The farm supports 85 Friesian–Hereford cross cows, joined to a Limousin bull for spring calving, and aims to produce heavyweight weaner calves that are sold at approximately 10 months of age. There is a mortgage across the farm and the whole-farm operation is supported through off-farm income, which also impacts on how much time can actually be invested on the farm.

Characteristics of the project site

The farmers of this property are active members of their local Landcare group. They are interested in increasing the productivity of their beef grazing system, which is a core motivation for establishing environmental plantings throughout the farm.

The first plantings were along fence lines in the low-lying parts of the farm to provide shade and shelter for the stock. A saline creek ran from the northern blocks of the farm, feeding dams in the southern block. The next planting was done along this creek to try to address the salinity issue. They achieved this with the farmer reporting that the electrical conductivity (EC) of the water was lowered from approximately 2500 EC to 500 EC.

Older planting that demonstrates how plantings can be incorporated into a beef grazing farm; the planting follows a creek line, and is now fenced and revegetated along the entire length of the creek

Two of the plantings where the environmental plantings methodology determination will be applied are located on the crests of the hills and along the ridge lines that run approximately north–south. The third planting is at the break of slope (on the northern aspect) and evolves into three separate shelter belts along and between two improved pasture paddocks.

Deciding where to plantThe farmers in this case study have been planting trees on their farm for the last 10 years, all as permanent environmental plantings. The areas of the plantings range from about 2 ha through to about 6 ha. Each successive planting builds on the environmental value of the previous planting, extending vegetation corridors and windbreaks.

The planting sites were identified in the whole-farm plan, which divided the farm into landclasses based on soil type, productivity and management needs. Only the poorest sites have been selected as a part of this project, which will affect the rate of tree growth. The farmers established 19 ha as permanent environmental plantings of which 16 ha may potentially be eligible to generate ACCUs through the environmental plantings methodology determination.


2 Land-use implications

The main purpose for establishing the environmental plantings was to make better use of land that was largely unproductive in terms of pasture growth and grazing potential. Consequently, the decision to put 19 ha of land under permanent environmental planting was not perceived as removing any land from production.However, the change in land use has had significant on-farm benefits, including groundwater recharge, wind shelter and increased amenity value. Beef cattle stocking rates have increased because of a prolonged growing season achieved through better shelter, and better pasture quality from intercepting groundwater recharge and decreasing salinity.

The environmental plantings methodology determination requires that the plantings are permanent and not for harvest. This requirement will not impact on the original intent of the plantings. The farmer became interested in tree planting after observing similar plantings on his neighbour’s property—how they made the farm more aesthetically appealing, and the long-term benefits being realised from them. The addition of expected carbon revenue might also contribute to his retirement fund.

New fences and gates were required because the planted areas largely exclude stock, other than occasional crash grazing over a couple of days, to keep the undergrowth down. Grazing only occurs after the first three years when the trees are big enough to withstand grazing.


Land-use implications

Overview of break-of-slope planting, older creek line planting and hill crest planting

Bottom-of-slope block planting petering into a shelter belt


3 Case study details and key decision points

All CFI projects must be undertaken using an approved set of instructions (called a methodology determination). In this case, it is the Methodology Determination for Quantifying Carbon Sequestration by Permanent Environmental Plantings of Native Species using the CFI Reforestation Modelling Tool. Some of the requirements of the environmental plantings methodology determination that apply to a small beef grazing revegetation project are presented in Table 2. These requirements are discussed further through the case study.

Table 2 Selection of requirements of the environmental plantings modelling determination that apply to a small beef farm

Methodology requirement for eligible project Small beef farm

Plantings have been established on or after 1 July 2007

Trees have the potential to reach a height of 2 m and attain 20% crown cover

Trees are established through planting

Project does not involve harvesting of wood products

Plantings consist of Australian native species that are native to the local area

Project will apply the ‘mixed species environmental planting’ setting in the CFI Reforestation

Modelling Tool

Project area is protected for first three years from grazing

Project has been established on land that has been clear of forest for five years prior to planting

Small, beef farm CFI projectThe environmental plantings being considered for the environmental plantings methodology determination are mostly on the crest and ridge line of the hill country, and are on an otherwise unproductive area of the farm. The plantings in this area also help to break the wind that blows across the top of the hills.


Case study details and key decision points

The main northern and southern aspects of the hills are used for grazing, and support the growth of native, unimproved pastures. One planting established just above the break of slope tails down into a narrow shelter belt, and is designed specifically to provide shade and wind shelter for the cattle.

Block planting has essentially been used on this property, but it has been adjusted to fit the undulating terrain. Essentially, the terrain dictated where the plantings should be established across the farm; plantings occur in blocks, with fence lines that follow the terrain, and as shelter belts along paddock fence lines.

Although the planting sites follow the terrain, the rows are straight where possible. The single-tyne rip lines were worked across the slope. The areas were naturally demarcated from the rest of the property by the lack of pasture growth on them.

Block planting at the break of slope

ACCUs could potentially be generated from plantings that occurred in 2008, 2009, 2011 and 2012. The total size of the four planting areas is 16 ha: 2 ha planted in 2008, 4 ha planted in 2009, 4 ha planted in 2011, and 6 ha planted in 2012.

Within the environmental planting areas there were some relatively small, unplantable areas, which consist of rock. Several of the plantings also encompass single mature remnant trees. Where this was the case, a buffer zone of 10 m from the drip line of the existing mature trees was observed, which will form an exclusion area. The buffer zone was designed to ensure no root disturbance when ripping the site, and aims to minimise the impact of competition on the new seedlings.



Hill crest planting incorporating existing single mature remnant trees; native red grass in the foreground

The farmer intends to plant further environmental plantings, building on successive established plantings so that the entire ridgeline will be revegetated, and every paddock has shade and shelter available for the cattle.

The species used are local and native species and consist of a mix of trees and shrubs at a ratio of about 2:1. The farmer sought help from a local nursery to select the species to plant.

The neighbour used the same nursery for their own plantings. The nursery specialises in growing farm tree seedlings, and in particular seedlings for Landcare plantings. The nursery also advised on site preparation (including ripping and weed control), tree spacing and site stocking. The tree species have the potential to reach 2 m in height and a crown cover of 20 per cent or more, which is necessary for the application of the environmental plantings methodology determination. Some of the shrubs will also attain these attributes.



Permanent environmental planting demonstrating crown cover and small unplantable areas (exclusion areas)

The ground was ripped in autumn to a depth of about 600 mm. Each rip line was treated with a knock-down and residual spray, and seedlings were planted into the middle of a rip line. The seedlings were planted just deep enough to cover the root plug of each seedling.

When the first site was ripped, the soft, newly disturbed soil attracted rabbits. On subsequent sites, after ripping, each rip line was driven along to flatten and compact the soil to deter the rabbits. This technique proved to be effective, without hindering the desired benefits of ripping.

Post-establishment, hand spot spraying is an ongoing task, to control Patterson’s curse, ink weed and blackberry. Cattle are allowed access to crash graze the sites over a couple of days each year to keep weeds and grass down.

Planning approvalsNo approvals from any local or state authorities were required to establish these plantings. The farm is located within a rural planning zone with the local government shire. The hill crest and ridge line plantings address issues in the Regional Catchment Strategy of the catchment management authority regarding a local groundwater recharge system, and enhance local biodiversity values. Since establishing the plantings, the catchment management authority has been monitoring the return of biodiversity on the sites.

Calculating carbon—what is measuredThe project areas were initially estimated directly from the whole-farm plan, and later using eFarmer1, which is a web-based program used to spatially capture farming activities, such as environmental plantings. eFarmer is supported by the local catchment management authority, and can calculate the area for each planting. It also shows how, and what, catchment management priorities the plantings influence, including salinity management, vegetation connectivity between plantings and remnant stands of vegetation.

1 eFarmer is developed and administered through the North East Catchment Management Authority to assist farmers within the region to plan and manage their farms. It provides a web-based mapping interface and has capacity to record textural data.



Each of the four environmental plantings will constitute one carbon estimation area (CEA). Determining a CEA requires information on the species mix, establishment year and management. As each planted area has the same species mix, was established at the same time (within one month from start to finish) and managed uniformly, they each constitute one CEA. Therefore, there are four CEAs for this farm.

The determination of CEAs and determining the boundaries of each is based on several conditions including:• same site characteristics—soil type, aspect and position on slope• defined boundary—field surveys and sampling, remotely sensed imagery, maps• uniform management—established using the same methods, at the same time, planted with

the same species mix, and managed over time in the same manner.

In addition to defining the CEA, the tree stocking for the site needs to be known. On this farm, trees have been established at 800–1000 trees/ha. This value is needed to calculate carbon in the CFI Reforestation Modelling Tool (RMT). The tree stocking rate will also provide at least 20 per cent crown cover as required by the environmental plantings methodology determination.

Baseline calculationsIn applying the environmental plantings methodology determination, new plantings on previously unvegetated land are assumed to have a zero carbon baseline. This is the case for all farms establishing new permanent environmental plantings and applying this methodology determination.

This farm already has established plantings, which means that the standing carbon stock needs to be calculated. There were 6 ha of plantings established in 2008 and 2009. They are both eligible to apply the methodology determination because they were established after 1 July 2007. The carbon stock as at 1 July 2010 needs to be calculated.

The carbon stored between the establishment date for each of these two plantings and 1 July 2010 cannot be used to generate ACCUs. Only carbon stored since 1 July 2010 is eligible to generate ACCUs through the application of the methodology determination. Consequently, only the 2011 and 2012 plantings are eligible to receive ACCUs for the entire growth cycle of the trees.

Data collectionThe data to be collected to apply the environmental plantings methodology determination includes the area of each CEA, the establishment method, the management of each CEA, and fuel used in establishing and managing the plantings. In addition, if any of the plantings are affected by a disturbance, such as fire, this will need to be recorded to accurately account for the standing stock of carbon at any one time. Table 3 summarises the data needed to apply the methodology determination.

Table 3 Data required for projects applying the environmental plantings methodology determination

Data needed Tool

Project area of each CEA CMT, GIS, eFarmer

Geographic reference point in each CEA CMT, GPS, GIS

Fuel data directly associated with CFI project RAC, Logbook

Disturbance data (e.g. fire, flood, pest, disease, etc.) RMT, RAC, GPS, GIS,

CEA = carbon estimation area; CMT = CFI Mapping Tool; GIS = geographic information system; GPS = global positioning system; RAC = Reforestation Abatement Calculator; RMT = CFI Reforestation Modelling Tool

Fuel data is collected only when direct project activity occurs. The fuel use during the establishment phase, including the fencing component of the project, is calculated from a conversion of the distance travelled to, from and around the project sites. Once the plantings are established, fuel-use data is only collected in relation to weed control activities within the



environmental planting area, which occurs two to three times per year, depending on the season and the weed being controlled.

Area data are collected only at the start of the project.

After the planting is established, management data are collected intermittently for activities on the project sites such as weed control and fence maintenance.

Disturbance data also needs to be collected and recorded in the RMT. This includes, for example, if there is a fire in one or more of the CEAs. The required data includes when the disturbance occurred, the extent of damage to the trees (alive or dead) and the area burnt within the affected CEA(s). Fire will release the carbon stored in the trees and therefore no further ACCUs can be claimed until the planting(s) have regrown to the same stage they were at before the fire occurred. The landholder also has a responsibility to take reasonable steps to make sure that the carbon stores are re-established, depending on the extent of the damage this may include replanting if the fire killed an area of trees.

ToolsThe web-based eFarmer program has already been used to map the planting sites and to calculate the area of each site. The RMT needs to be used to calculate the amount of carbon stored within the plantings and the Reforestation Abatement Calculator (RAC) needs to account for fuel use and calculate final abatement.

Benefits The carbon projects established on this beef grazing property in north-east Victoria have changed the productivity of the farm. Since establishing the plantings along the ridge line and shelter belts throughout the farm, two key positive impacts have occurred.

The ridge line plantings that could potentially generate ACCUs have influenced the local recharge groundwater flow system. These plantings, combined with fencing out the creek line and revegetating several years ago, have helped to lower the salinity levels of the water supply on the farm. The impact of lower salinity levels has also been observed within the paddocks with rich loamy soils, where barley grass (an indicator species for saline soils) was predominant. Now, since the plantings have been established, in combination with improved stock, soil and pasture management activities, the improved pasture paddock supports approximately 2 t/ha of green dry matter.

Permanent environmental plantings on the ridge line have significantly altered the amount of groundwater recharge, which has helped reduce salinity



The other impact of incorporating the trees on the farm has been providing windbreaks and shelter for stock and the pasture. A flow-on effect of the shelter on the pasture is that it extends the growing season. The quality of the pasture has also improved, which has enabled the farmer to increase the overall cattle-carrying capacity of the farm. This is despite making the paddocks smaller and ‘removing’ areas of land for permanent environmental plantings.

Biodiversity has also increased. In particular, the number of birds on the property has increased significantly, especially some of the smaller species such as wrens and fantails. The single remnant trees encompassed by a couple of the plantings are exhibiting renewed vigour—fresh crown growth is evident since segregating them from the permanent cattle grazing areas.

Environmental plantings have created niche environments and habitats that attract birds and other wildlife, and significantly reduce the effect of the prevalent wind

The trees have also added significant amenity value to the property and provide a sense of joy and achievement for the farmer who can now see how they have positively altered his farm landscape. The hills were initially ‘bald’, windswept and unproductive pasture-growing areas. Since revegetating the crest of the hills and along the ridge lines, the farm ecosystem has shifted from a harsh and foreboding environment, to a more habitable and productive system (better pastures as well as better use of them), as well as a desirable spot for recreational activities such as picnics and barbecues.


4 Pre-project needs

Site preparationTo establish the trees, each site was ripped to a depth of 600 mm using a single-tyne ripper. The ripping was completed in the autumn before the planned planting season to allow winter moisture to penetrate the soil and for frosts to fracture soil clumps, thereby improving soil structure for the seedlings.

The newly disturbed soil along the rip lines encouraged rabbits to dig. To combat this, each fresh rip line was driven over to flatten out the freshly disturbed ground. This method worked on this site because the soils have a high proportion of sand. If they had been heavier soils with a higher clay component, driving over the rip line may have reduced the effectiveness of the rip line.

The site preparation for the environmental planting sites on this farm is both repeatable and applicable to many environmental planting projects in other farming systems.

FencingThe environmental plantings methodology determination requires stock to be excluded from permanent environmental planting sites for a minimum of three years.

Fences were erected around each planting. When the first planting was done, the property carried a small flock of sheep and ringlock fencing was used around the planting. The farm now only runs beef cattle and has adjusted the fencing. A three-wire fence is now used with posts and droppers approximately 3 m apart, and a hot-wire run just below the bottom wire to keep the cattle out.

Gates have been included for access into every planting area, with one of the larger plantings having vehicle access right through the middle of the planting. Each planting site is crash grazed each year to keep the pasture down and to lower fire risk.


Pre-project needs

Ringlock was used around the earlier plantings before changing the farming system to a beef grazing system only. Ink weed (foreground) is an ongoing management problem

Pests, weeds and pathogensThe rip lines were strip-sprayed by hand a few weeks before planting to reduce weed and pasture cover on the site, thereby minimising competition to the new tree seedlings. The strip sprayed was approximately 1 m either side of the rip line. For the herbaceous weeds and pasture, a knock-down spray specific to the weed type was used. For any woody weeds (e.g. blackberry), a herbicide specific to woody weeds was applied after the herbaceous weeds were sprayed. Residual spray was not used because regrowth of the pasture was desirable in the long-term.

Environmental asset protectionThe plantings on this farm serve to protect and improve the health and environmental value of existing single remnant trees. One of the ridge line plantings totally encompasses four such mature trees. To ensure that they were not damaged during the establishment phase of the new plantings or as the environmental plantings grew, a buffer of 10 m outside of the drip line of the trees was implemented. The lateral root systems of the mature trees are most likely to extend to the extent of the drip line of the canopy. By adding an extra 10 m onto the drip-line boundary, root disturbance to the mature trees should be minimised. The buffer also reduces site competition, enabling the new trees to grow to their maximum potential.

A minimum buffer of 5 m either side of the creek line was also implemented in one of the first plantings on the farm, which is not eligible to generate ACCUs due to the planting prior to 2007. This buffer was extended where needed, such as around a wet soak area. The aim of this buffer was to ensure that neither the natural watercourse was altered or damaged, and to ensure that the water quality was not compromised. In this year’s planned planting, one of the shelter belts intercepts the creek; the 5 m buffer at the end of the shelter belt where it intercepts the creek will be maintained, for the same reasons.


Pre-project needs

Permanent environmental planting across the ridge line and down the northern aspect of the hill


Practical skills Practical skills that were needed to establish the permanent environmental plantings include: • understanding of the landscape, which ultimately defined the project boundaries• erecting fences to keep stock out, including installing gates• completing the ripping using a single-tyne ripper behind a tractor• knowledge of suitable spray chemicals for the weeds and ability to do the spraying• hand planting of the trees using pottiputkis and shovels.

The practical skills required and the labour to complete the planting was provided by the farmer. He borrowed his neighbour’s tractor and ripping tyne to undertake the soil preparation. The farmer drew on his own knowledge when it came to determining what type of fencing to erect around the plantings and, to keep external costs down, he erected the fences himself. For the actual planting of the trees for each of the sites, he had assistance from the local Landcare group, of which he is an active member.

More specialised skillsThe farmer engaged the local farm tree nursery and catchment management authority to assist him to identify local endemic species appropriate for the sites and advise him on site establishment techniques, including preparation and tree spacing. The farmer opted for a wider spacing between trees both within and between rows. The reason for the wider spacing was to allow some pasture growth to continue so that the areas could be used as short-term, sheltered grazing grounds during periods of inclement weather. The wider spacing also enables easier vehicle access for ongoing management and maintenance of the sites.

In applying the environmental plantings methodology determination, and to provide the specialist technical knowledge needed to trade the carbon, the farmer is going to engage a carbon aggregating business.

5 Resources and skills required


Generating ACCUs from an environmental planting is expected to provide a revenue stream for the holders of the carbon rights while the forest is actively growing.This farm still has a mortgage attached to the land titles on which the environmental plantings have been established. To create and offer ACCUs to the carbon market, the farmer will need to seek approval from the financial institution that the mortgage is with. An alternative is to remove the mortgage from the land titles on which carbon from the environmental plantings is going to be sold.

Creating ACCUs from environmental plantings requires a long-term commitment from the landholder to maintain that planting for 100 years. This creates a legal long-term liability regarding the maintenance and upkeep of the plantings.

The plantings established within this beef grazing farm were planted on land parcels of 2–6 ha that were predominantly clear of trees (other than a few single remnant trees). The newly planted trees are expected to grow to a height of more than 2 m. This means that the plantings comply with the definition of reforestation under the Kyoto Protocol, and that the credits generated from these environmental plantings through the application of the environmental plantings methodology determination would be Kyoto ACCUs.

Kyoto compliant abatement has the potential to contribute to the National Greenhouse Gas Accounts. Kyoto ACCUs also have the potential to attract a better price per tonne of carbon in the market place than non-Kyoto (voluntary) ACCUs.

Rates of carbon storage and ACCU generationRates of carbon storage vary depending on a range of factors, including, site, species selection and the age of the trees (as young trees generally store carbon faster than older trees). Table 4 summarises carbon storage rates and indicative ACCU generation that could be achieved from the environmental plantings on this farm.

6 Australian carbon credit units


Australian carbon credit units

Table 4 Summary of carbon storage and ACCU generation potential

ACCU generation Indicative value

Potential rate of carbon storage on site 6–12 t/ha/year of CO2-e

Indicative annual carbon storage potential from

the plantings

96–192 t/year of CO2-e

Indicative annual number of ACCUs per year 91–182 ACCUs per year

Indicative total carbon storage potential over 30 years 2900–5700 t of CO2-e over 30 years

Potential revenue from ACCUS Determined by carbon credit market price and may

depend on the nature of the ACCU that is generated

(e.g. Kyoto or non-Kyoto (voluntary) ACCUs)

In the north-east beef grazing region of Victoria, an average rate of carbon storage might be between 6 and 12 t/ha/year of CO2-e, depending on a range of factors including soil type, rainfall, species and planting density.

Based on this rate of carbon storage, the 16 ha of environmental plantings established on this farm could sequester between 96 and 192 t/year of CO2-e. The plantings are assumed to reach maturity at 30 years of age. Over the next 30 years of forest growth, the plantings are estimated to sequester approximately 2900–5700 t of CO2-e.

Because this is a sequestration project five per cent of the potential ACCUs being generated are withheld by the regulator to cover the ‘risk of reversal buffer’ (a form of insurance to cover short term losses due to disturbance events). Therefore, this project could generate 91–182 ACCUs per year. These ACCUs could then be offered and traded in the carbon market or banked for future sale.

The price that could be received for the ACCUs would reflect the supply and demand conditions associated within the market for ACCUs at the time of sale. Like any other commodity, the price is expected to fluctuate over time and will depend on a range of factors, including, the type of ACCU being traded. The potential price a project could receive is a factor that needs to be considered when deciding to undertake a project.


Project setup costs There are various direct costs in establishing an environmental planting. These direct costs include fencing materials, herbicide for spraying, tree seedlings and guards. The fencing materials included posts and droppers, stays, gates and electric fence materials, including wire and insulators.

Although the fencing materials were not purchased in isolation to materials bought for other parts of the farm, the cost should be accounted for within the project setup costs. Gates added extra cost to the fencing supplies but for the longer term, and ongoing management of the permanent environmental planting sites, they are important and were considered to be worth the extra cost. A single electric wire is being run around the bottom of the fence to deter the grazing cattle from pushing through into the planting site.

The herbicide costs are also a direct project setup cost even though it was purchased as a part of normal farm management purchases. The tree seedlings were supplied by a local farm tree nursery and, being an active Landcare group member, they provided a small discount on the trees. Every tree planted was guarded using three small stakes and a plastic Landcare guard. This was a direct cost for the first two planting sites. By the time the third planting site was being established, the guards had been removed from the first two sites and recycled in the third. So the cost of guards was for replacements only. For the fourth planting, because the 2011 trees were still too small to remove the guards, tree guards were again a direct project setup cost.

Labour is also a direct cost to the farmer even though nothing was contracted out because time spent on establishing the plantings is time away from carrying out everyday farming activities associated with a beef grazing enterprise and as such, should be accounted for.

Variable and direct costs Using an aggregator to manage the project will add direct costs to the project, however, these costs may be offset by the increased economies of scale and expertise offered by the aggregator. Depending on the type of setup and who will own the carbon rights and become the Registered Offsets Entity, the cost may be embedded within the revenue received from the aggregator or it may be borne directly.

A sequestration CFI project requires approvals from all parties with an interest in the land so there may be associated direct project costs in removing the mortgage from the farm or seeking approvals from the bank. There may also be legal fees regarding understanding the contracts with the CFI and the aggregator.

7 Potential costs


Risks associated with establishing, managing and trading carbon from permanent plantings on this farm through the environmental plantings methodology determination are both intrinsic and extrinsic. Some are directly related to the planting itself, whereas others are more uncertain and difficult to plan for.The intrinsic risks include early tree mortality due to severe frosts and harsh environment, competition threat of pastures that persist within the planting sites, crash grazing of the site too early causing irreversible damage to trees and timely removal of plastic tree guards. Some of the extrinsic risks include bushfire; climate change, carbon markets and farm subdivision.

Early mortality riskThe crests of the hills and the ridge lines of this property is where the majority of the permanent environmental plantings have been established. The core reason for choosing these sites was because they produced poor pasture and were not preferred grazing sites for the cattle because of the constant wind exposure. Although placing the trees in these areas of the farm has meant that little to no highly productive land has been lost to the establishment of the trees, it is also the poorest part of the farm. For the same reason that poor pasture grew on these sites, the early growth of the trees could also be hindered.

The farm also experiences heavy frosts, which have the potential to significantly damage or cause mortality in small seedlings. Planting time is critical—seedlings need to be planted after the worst of the frosts. Tree guarding is also an important part of establishing plantings on highly exposed sites.

Competition threat of pasturesThe sites where the permanent environmental plantings have been established are intended to provide occasional, sheltered grazing. As such, the tree spacing is wider than conventional plantings, and pasture species have been encouraged underneath the trees by using herbicides specific to the target weeds without killing the perennial layer of pasture.

However, the risk associated with this management action is that if the perennial pasture species outgrow the trees, unnecessary water and nutrient competition could severely affect the successful establishment of the trees.

8 Risk analysis


Risk analysis

Crash grazingApplying the environmental plantings methodology determination to a permanent environmental planting means that stock must be excluded from the site for the first three years after planting. After this time, controlled, crash grazing of the site is allowed, so long as the integrity of the project is not jeopardised.

Beef cattle and, in particular, the breeds used on this farm, are large animals. Allowing them to crash graze the environmental planting site to keep the pasture growth down could cause detrimental mechanical damage to the trees. At early stages of development, even after the required three-year stock exclusion, the trees could be trampled, broken or grazed off while small.

As the planting matures, cattle will still pose a significant risk to the health and vigour of the planting, particularly if they rub against the trunks to an extent where the tree becomes ringbarked. Crash grazing is an effective way to manage fuel and pasture loads; however, it needs to be monitored closely to minimise risk to the trees.

Tree guardsAlthough using tree guards has assisted the rapid and early establishment of new seedlings on the crests of the hills and along the ridge lines, a risk is posed if they are not removed on time. If left for too long, the trees will eventually grow around and over the guard, which may cause deformation and mortality. If they are not collected, they can also work their way loose from the stakes and blow across the farm.

FireThe region in which this farm is located is subject to hot, dry summers. Bushfires are not uncommon, particularly through the heavily forested hills of the parks and reserves within the region. With the plantings located on the crest of the hill and along the ridge lines, they are susceptible to fast-running fires from all directions. However, on the positive side, each planted site is surrounded by native pastures. These are grazed reasonably heavily to keep the fuel load down, but also have green feed at the base of the pasture, even in the height of summer.

The other potential risk associated with the planting design used on this farm is the extensive shelter belt network established across the farm. Although effective at providing shade and wind shelter for stock, shelter belts can pose a ‘wicking’ fire hazard whereby a bushfire moves swiftly along the shelter belt, moving the fire into other parts of the farm. Evidence of this type of fire behaviour along shelter belts has been well documented. Under the CFI, the ‘risk of reversal buffer’ covers the plantings while they are regrowing to their former state without penalty to the carbon rights owner.

ClimateClimate change and climate risk are two issues that are likely to impact every aspect of Victorian beef-farming enterprises, including any permanent environmental plantings established within the farm.

Climate change is a real risk for environmental plantings and the permanency requirement within the environmental plantings methodology determination. The impact of prolonged dry periods followed by exceptionally wet seasons has the potential to cause mortality through either water deprivation and/or instability caused by saturated soils. If such events cause mortality within the planted areas, and jeopardise the minimum required 20 per cent crown cover, then infill planting may be needed.

The other key risk associated with climate change and climate variability is that of more severe and frequent storm events. Several severe wind storm events have already been experienced on this farm, with forces strong enough to destroy shedding and mature trees in the paddocks. If such a disturbance were to adversely affect the permanent environmental plantings, it would need to be recorded within the RMT.


Risk analysis

The demand for ACCUs generated from permanent environmental plantings within the emerging carbon market is not yet known. As such, the supply and demand for such ACCUs will dictate the potential revenue from the carbon, like any other commodity traded from the farm core business.

Land subdivisionMany farms in north-east Victoria are progressively being subdivided to accommodate the demand for lifestyle farms. This impact is amplified near major regional towns. The risk associated with creating and trading ACCUs through the application of the environmental plantings methodology determination is that the planting is tied to a land title. If the farmer wants to subdivide the land in the future—to downsize or move off the land entirely—a carbon covenant tied to the land title may prevent the subdivision. The 2011 planting is situated across two land titles, which may impede any future land subdivision.

SummaryCarbon is a commodity and, like other core farm business activities, such as beef production, there are both intrinsic and extrinsic risks associated with producing and trading that commodity. The application of the environmental plantings methodology determination provides farmers who have either existing plantings (established on or after 1 July 2007) or new plantings, with an alternative, revenue stream.

Each planting that has been established on this farm has added value to the core farm business of beef production. In the longer term, the plantings may also help mitigate some of the future climate risks that the farm will face.


ACCU Australian carbon credit units

AFS Australian Financial Services

CEA carbon estimation area

CFI Carbon Farming Initiative

CMT CFI Mapping Tool

CO2-e carbon dioxide equivalent

EC electrical conductivity

GIS geographic information system

GPS global positioning system

RAC Reforestation Abatement Calculator

RMT CFI Reforestation Modelling Tool

Units

ha hectare

km kilometre

m metre

mm millimetre

t tonne

Abbreviations

Edition 01 2012

The ‘Biosphere’ Graphic ElementThe biosphere is a key part of the department’s visual identity. Individual biospheres are used to visually describe the diverse nature of the work we do as a department, in Australia and internationally.

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carbon farming initiative case study 13.8 beef grazing in north-east

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