Carbon farming is a multifaceted approach to addressing climate change. But how does it relate to engineers, and how could carbon farming shape the future of sustainability?
Engineers find themselves increasingly at the forefront of developing technologies that not only address the environmental impact of climate change, but also enhance the sustainability and efficiency of industries.
Carbon farming plays a critical role in this transformation, offering engineers a platform to apply their skills towards sustainability.
Carbon farming not only incentivises sustainable engineering practices but also highlights the importance of staying informed and proactive in the application of those technologies. As engineers navigate the complexities of sustainability, carbon farming reinforces the essential link between engineering innovation and environmental stewardship.
What is carbon farming?
Broadly, carbon farming is a set of land management practices designed to store carbon or reduce greenhouse gas (GHG) emissions, which generally fall into two main categories:
- Sequestration offsets projects, which capture and store carbon dioxide
- Emissions avoidance offsets projects, which prevent GHG from being released
Individuals carrying out offset projects can earn Australian carbon credit units (ACCU) under the Carbon Credits (Carbon Farming Initiative) Act 2011 (CFI Act).
What is an ACCU?
An ACCU is a unit issued by the Clean Energy Regulator (CER), representing one tonne of carbon dioxide equivalent removed, stored or avoided by an offset project.
ACCUs are issued as either Kyoto ACCUs or non-Kyoto ACCUs, depending on the project type and reporting period.
What can you do with ACCUs?
ACCUs, a financial product under the Corporations Act 2001, can be used for compliance with:
- Emissions reduction regulations, which is a safeguard mechanism
- Voluntary offsetting of carbon emissions
- Trading in carbon markets, including participating in the ACCU auction by the CER through carbon abatement contracts
It is advisable to seek independent legal and/or financial advice regarding individual circumstances.
What’s in it for engineers?
The ACCU scheme provides engineers with a platform to apply their skills in addressing one of the most pressing challenges of our time: climate change.
It has the potential to drive innovative solutions that enhance the efficiency and sustainability of diverse sectors, generating significant environmental, economic, and social benefits.
Engineers are at the forefront of developing technologies and processes that reduce GHG emissions. Through thoughtful design, they can transform traditional operations into sustainable ventures.
Further, expertise in data analysis and system design can drive the efficiency and scalability of offset projects, making them viable and attractive for investment. This has the potential to contribute not only to an organisation’s long-term success but also to resilience in a rapidly changing world.
In short, the ACCU scheme presents opportunities for engineers to drive innovation, making it essential for the engineering community to stay informed about this scheme.
How do entities participate in the ACCU scheme?
The CER must ensure that an offset project meets several conditions before declaring it as an eligible offset project. These conditions include:
- It must be carried out in Australia.
- It must be covered by and meet the specific requirements set out by the relevant methodology determination.
- It must fulfil additional requirements, which include the newness requirement (the project has not begun to be implemented) and the regulatory additionality requirement (the project is not required by law).
- The applicant must be the project proponent and pass the fit and proper person test.
What is a methodology determination?
A methodology determination is a legislative instrument under the CFI Act that sets out the rules and requirements for carrying out a specific type of offset project.
Normally, a method outlines the eligibility criteria, baseline determination, emissions reduction calculation, monitoring and reporting requirements, and additionality requirements that a carbon farming project must adhere to.
What projects may be covered by carbon capture and storage (CCS)?
This method applies to businesses aiming to reduce emissions through underground storage from industrial processes or oil and gas activities. Eligible projects require a new source of GHGs, such as new industrial process capture points or hydrocarbon field extractions.
They must involve capturing and permanently storing GHGs underground, which necessitates comprehensive reservoir assessments, technical specifications and rigorous monitoring.
What are the limitations of the CCS method, and are there alternatives?
The CCS method doesn’t encompass a number of promising engineered removals such as biochars and direct air capture (DAC).
While there is a concern that such technologies would further allow heavy emitters to conduct business as usual, they are arguably critical for sectors such as cement, steel and aviation with few low-carbon alternatives.
DAC, still evolving, faces challenges in scaling and cost management but is vital for climate change reversal by removing carbon dioxide from the atmosphere. Biochar – with its potential for long-term carbon sequestration and uses in soil amendment, water filtration and construction – may not have a dedicated carbon credit method soon.
However, many carbon reduction technologies and practices may be eligible as offset projects across industries including commercial buildings, transport and waste management. Importantly, many of the methods require specialist skills – such as those of registered professional engineers.
What projects may be covered in commercial buildings?
The commercial buildings method focuses on improving energy efficiency in buildings rated under the National Australian Built Environment Rating System (NABERS).
Examples of eligible activities may include:
- Upgrading lighting systems to LED, which can be 50 per cent to 70 per cent more efficient
- Enhancing HVAC systems such as ground source heat pumps
- Installing micro cogeneration units to heat water and produce electricity
What projects may be covered in the transport industry?
In the transport industry, offset projects include:
- Vehicle replacement (upgrading to more fuel-efficient or electric vehicles)
- Vehicle modification (aerodynamic improvements across the fleet)
- Fuel switching (transitioning from fossil fuels to biofuels, hydrogen or electricity)
Other projects involve changing operational practices (route optimisation), and integrating new technologies (such as smart telematics) to enhance fuel efficiency and reduce emissions.
What projects may be covered in waste management?
In the waste management industry, eligible offset projects may include:
- Alternative waste treatment, such as processing mixed solid waste through anaerobic digesters
- Landfill gas management including upgrades capable of reducing methane emissions
- Landfill gas generation including generating electricity from captured landfill gas
Wastewater projects – such as replacing open lagoons with anaerobic digesters to reduce methane emissions or upgrading biogas into biomethane – are also covered.
Final thoughts
As engineers continue to develop and refine technologies like carbon capture and storage, biochar, and direct air capture, we will see a broadening horizon of possibilities for offset projects across various sectors, from commercial buildings to transport.
While challenges persist, notably in scaling emerging technologies, carbon farming points to the potential of collaborative, cross-sectoral efforts in driving environmental sustainability.
Find out what engineers need to know about climate-related financial disclosures.
