Large Scale International Soil Carbon Credit Deal Benefits Australian Farmers

In a pioneering first for investors in Australian agriculture, Impact Ag Partners together with Regen Network have originated a soil carbon credit deal with a global technology company for ecosystem services generated from Impact Ag’s agricultural assets under management, the first transaction worth $500,000 AUD.

The recent announcement from Regen Network of the historic sale of soil carbon credits to Microsoft is one of the largest soil carbon credit issuances ever in Australia and assists Microsoft to meet its climate goals while also rewarding Australian land stewards for sequestering carbon as well as ecological stewardship of their asset. The credits measure soil carbon sequestration using remote sensing technology, and several other related benefits, including ecosystem health, animal welfare and soil health. Impact Ag’s natural capital specialist, Toby Grogan, said the deal demonstrates the win-win outcomes of enhancing farm productivity through increased soil health while creating significant surplus carbon credits for trading with third party emitters.

“This is an indication of what is going to be possible in the future for farmers who are focusing on their soil health and particularly on how they can enhance their soil carbon,” Mr Grogan said.

Impact Ag Partners are driven to create a future where natural assets are nurtured and protected. Mr. Grogan explained in late 2020 that natural capital comprises Earth’s natural assets (soil, air, water, flora and fauna), and the ecosystem services resulting from them, which make human life possible (UNEP Finance Initiative). Using a framework for natural capital presents a way for land managers and companies to appreciate nature and to embrace the imperative to measure, manage and invest in natural systems with the same due diligence we as a society use for other forms of capital. In an agricultural setting, natural capital can be developed through a number of agricultural management practices that build and conserve carbon, enhance biodiversity and water quality and cycling.

Impact Ag Partners operate with a long-term view and work with partners and investors to find solutions to today’s demands for economic return, food, and fiber production whilst enhancing the land’s long-term resilience and production capability.
The approach they take to land stewardship comes with its own inherent benefits in terms of profitability, seasonal resilience and production quality. They strive to have a meaningful impact in the short to medium term in finding a way to monetize the natural capital that good land stewards create.

Bert Glover, Impact Ag Partners Managing Director believes that building natural capital for future generations can be done profitably as demonstrated by the sale of these voluntary market credits contributing an additional 0.5% – 1% annual cash yield.
“The asset management strategy with our investors has always been based upon profitable stewardship while generating natural capital through regenerative agriculture. This has been demonstrated with our long-term investor relationships focusing on integrating the principles of regenerative agriculture to increase productivity while enhancing soil health. The carbon projects are a progression towards realizing alternative income streams for value created through ecosystem service management.”
“The generation and sale of carbon credits is a testament to the on-farm manager’s expertise and the role they play in executing the management and operational practices involved, whilst guiding and leading their teams,” he said.

Microsoft, Regen Network and Impact Ag Partners all acknowledge there is a great deal of work still to be done to refine carbon farming methodologies, measurement and markets. These markets are in their infancy and will be able to be improved. A future where there is full market participation will look different from the structures in place today and will likely have room for both regulated markets as well as private exchanges.

Impact Ag Partners are part of a team working with the Clean Energy Regulator to help develop the regulated market for soil carbon credits in Australia and, as a result of this work, we hope that soil carbon projects will become widely available to Australian farm landholders soon.

Impact Ag Partners believes agriculture will play a significant role in providing solutions to the climate challenges faced today and in the future. The ability to monetize natural capital is a productive and financial advantage for Australian landholders.