 My question to the group here today, who's heard of carbon farming? Put up your hands, please. Who believes they understand carbon farming? I had a feeling that might be the response. I would like to introduce Emma Winslow, Climate and Adaptation Project Officer at PERSA to present Carbon Farming and Footprint Assessment. Thanks for that introduction, Graham. So hopefully by the end of this presentation you might be at least a little bit clearer about what carbon farming is and how it might work. So just to give you a really quick overview to start with, inherently agricultural practices release greenhouse gases into the atmosphere. This is primarily through methane from animal digestion and as nitrous oxide from fertiliser application. So carbon farming in itself is any change to... any change to farming practices or land management that results in either the increased ability for plants or soils, so that includes things like pastures and trees and other kinds of plants to increase the uptake of CO2, which is called sequestration, or any activity that reduces the amount of emissions that are emitted as a result of those farming practices. So this can occur from things like pasture and animal management, animal effluent management, soil management, so things like increase in manure use, which increases the amount of carbon that can be stored in soil. So there are a number of benefits that can be directly correlated to carbon farming practices, and these include things like an increase in soil organic matter and soil carbon actually increases the soils ability to retain nutrients and water, which can then act as a buffer to some droughts. Things like improved vegetation cover can act to mitigate the risk of erosion during storm events. Increased trees and vegetation can provide things like shade and shelter to stock. They can provide food and habitats to wildlife. They can increase the ability to provide resistance to pest and animal diseases. So there's a wide range of benefits that are associated with carbon farming, and collectively these are called co-benefits. So I'll talk a little bit more about co-benefits down the track, but that's just to give you a broad overview. So in terms of carbon farming itself, there are a couple of different options. One which I'm sure you're all aware of is the ability to trade those carbon credits. So that means to measure and accrue credits and then sell them to a third party. So Australia has a relatively robust system for doing this, and that is through the Emissions Reduction Fund, where landholders are able to enter into projects and reduce their emissions or sequester carbon and accrue carbon credits in that way, which they can then sell. The other thing to note with carbon farming or the other track that you might like to go down is a move towards carbon neutrality as a business enterprise. So that can include things like reducing your farm emissions to move towards carbon neutrality as your own enterprise, which has a range of implications and market implications, which I'll also talk about a little bit later. I think the important thing to note with carbon farming, and I'll make this point several times because it is very important, is that if you accrue carbon credits and then sell them, those credits can then not be used to offset your own emissions on property. And that's going to be really critical going forward in terms of engaging in carbon farming, to make those sorts of decisions, whether you want to move towards carbon neutrality as an enterprise for the range of benefits that I'll talk about in a minute, or whether you want to use carbon credits to sell or trade as an additional income stream. So in terms of moving towards carbon neutrality as an enterprise, there are a few market drivers that will come into play and there's not a lot of market incentive at the moment, but it's something that's probably going to be developing in the next 12 to 18 months, two years. And that's as a result of some of these trading partners, food and beverage organisations and industry bodies that are starting to make carbon neutrality commitments. So this is just a handful of companies and some of our major agricultural trading partners that have developed commitments to move towards decarbonisation along their supply chains. So the companies and industry bodies that are represented here in red have all made commitments by 2030. I guess one of the most important ones to note for this crowd is that MLA have made a commitment for the red main industry to be carbon neutral by 2030. So there's going to be increasing pressure to move towards carbon neutrality from these sorts of industries. A lot of the other businesses that are listed here have made stepwise commitments. So for example Woolworths, which you can see up here at the top, have committed to reducing their carbon emissions by 19% by 2030, and that's across their entire supply chain. So that includes their own operations, including transport, warehouse manufacturing, as well as the people that are supplying to them. And then they've made a further commitment to be completely carbon neutral along their entire supply chain by 2050. Likewise, Coles has made a commitment to reduce its own carbon emissions by 75% by 2030 and then move to complete neutrality by 2050. Some of the other ones that are worth noting, Nestlé, Kellogg's, Dairy Australia, Cargill, Pepsi, McCain, General Mills, there are so many companies that have made these commitments and in essence that means that for them to achieve that carbon neutrality, they're going to need to start looking for suppliers that have carbon credentials themselves. So they don't want to take on other people's carbon emissions. They're needing their suppliers to move towards carbon neutrality as well. I guess importantly, this also opens up the opportunity of premium markets. So producers that have certified neutrality on their property can start to access more of these markets and may start to attract premium pricing. In a similar vein, a lot of the major banks in Australia, so A&Z, Commonwealth, Westpac and NAB, have all made major commitments to move towards carbon neutrality. They're starting to recognise the social and environmental reporting that needs to happen, that consumers are increasingly demanding. And they've all made commitments to align their lending portfolios with the outcomes of the Paris Agreement, which I'm sure you've all heard about. The Paris Agreement is an agreement to cap global warming to 1.5 degrees by 2050. And they've recognised the importance of this and their consumers are pushing for this as well. So from a banking perspective, there's probably three main drivers for why they have made these sort of commitments. The first that I just mentioned is that consumers are increasingly demanding that the companies that they engage with have environmental credentials. So that's why the banks in and of themselves in their own operations are largely moving towards carbon neutrality. So that's something that NAB achieved in 2010 within its own operations and the other banks are also working towards. The second one, which I've also sort of alluded to, is that consumers are increasingly demanding these environmental certifications and credentials from the products that they buy. And banks have recognised that there is a potential then to access some of these premium markets. So from their point of view, their product is going to attract more money if it has these eco credentials attached to it. And lastly, which I think is really important as well, is that a lot of these banks have actually recognised that climate change and a variable climate is actually quite a big risk to production in and of itself. So for them to support producers that are engaging in carbon farming or moving towards carbon neutrality, they are A, reducing the risk of increasing the variable climate going forward, and B, they are supporting those farmers that have undertaken carbon farming opportunities which increase natural capital on farm and then start to buffer against some of those impacts of drought and variable climate that I spoke about before. So properties that have an increased natural capital actually have a lower risk. So it's a risk mitigation strategy on their part. And to this effect, the Commonwealth Bank has actually identified that that is a risk and it's written into their business strategy going forward. Not only that, they're putting their money where their mouth is. So you can see here in the last column, every bank is actually committing a significant amount to funding carbon farming opportunities or funding eco-credentials within their lending portfolio. As I talked about before, there are a range of co-benefits that can happen alongside carbon farming. They can be environmental. As you can see, there's a range of environmental co-benefits. They can be social and they can be economic. So from an economic point of view, just to give you an example, I guess one of the most important ones is increased farm productivity and profitability. So a recognised and verifiable carbon farming activity is liming soils that are prone to acidity. So that increases the ability of that soil to store and hold carbon. The co-benefits that can happen alongside liming soils is increased productivity of pastures or crops, increased efficiency of fertiliser use and a reduction in farm inputs for fertiliser. So you can start to see pretty quickly that some of these carbon farming activities have significant implications for on-farm profitability as well. The other one that I'll just talk through now is an environmental co-benefit, which is biodiversity, which is gaining a lot of traction nationally and internationally. And there are some schemes at the moment that are developing biodiversity credits. So for example, in Queensland, the Land Restoration Fund is a scheme whereby producers enter into a carbon farming project to accrue carbon credits. And alongside that, they have biodiversity implications as well. So these sorts of projects can include things like revegetation or afforestation or environmental plantings that increase biodiversity on-farm. And in some cases, within those projects, the biodiversity credits are selling for as much as the carbon credits themselves. So internationally, those credits are recognised as premium credits and are attracting a premium price on the international market. And this has sort of been recognised by the federal government and they've now got an agricultural stewardship package, which is piloting carbon and biodiversity projects. So that's projects that accrue carbon and biodiversity credits alongside one another. So those projects will go towards the development of a biodiversity market as well. So hopefully that doesn't add to the confusion. As I've alluded to throughout my presentation, carbon trading is obviously a major part of carbon farming. The unit for trading carbon is an Australian Carbon Credit Unit or an Accu. And one Accu is equivalent to one tonne of carbon dioxide equivalent stored or avoided. So if those emissions are avoided, then that is one Accu, or if it's stored within the soil of vegetation, that is also one Accu. Accus are accrued through emission reduction fund projects. These projects are administered by the Commonwealth Government and have a robust set of methodologies that must be adhered to in order to accrue those credits. It is a robust system in terms of international carbon crediting systems. It's relatively well developed. There are a number of methodologies that can be implemented on farm and by land managers. As you can see from the map up here, South Australia has a relatively low number of projects within the ARF. And so this map says that we have 32 projects. That's the number of registered projects, which is step one. The number of projects that are actually contracted within South Australia is only 13 projects. So first step is to register a project and then to contract a project and begin to accrue carbon credit units is the second step. And that's a much lower uptake in South Australia again. I guess importantly to note from a trading point of view is that agriculture has dominated the ARF so far since its inception in 2012. So 70% of the emission reduction fund projects that are currently underway in Australia are agriculturally related and 65% of the Accus that have been credited so far are based on agricultural practices. So there's an enormous opportunity for landholders in Australia to start to engage in this process. In terms of actually trading carbon credits, when I looked yesterday, when I last updated this slide, the spot price closed at exactly $30 per carbon credit. As you can see, for a relatively long time, the price for carbon credits sat just below $20. Towards the middle and end of last year, there was a relatively steep increase in this price and it closed just under $60 per carbon credit unit, which is enormous. The reason for this increase is because of increasing demand internationally for these credits. So that pushed the price up. Earlier this year, there was a pretty significant drop again and that drop happened because of a change in the way that the federal government was managing those contracts. So up until this point, those contracts were managed so that the Accus was sold directly back to the Australian government. At this point, the government opened up those contracts so that the Accus can be sold back to them or it can be sold on the broader market. So that drop sort of occurred because there was an increase in supply, not because there was a drop in demand. And it's settled now relatively consistently for the last month or so at around that $30 mark. I will make the point here again that if you go down the route of trading carbon, then that carbon can no longer be used to offset your own on-farm emissions. So it's a matter of looking at your own business plan going forward and working out whether you want to move towards carbon neutrality as an enterprise or whether you want to start to engage in the carbon market as a revenue source in and of itself. But once they're gone, they're gone. So to bring things back again, a really simple and tangible way to get started within carbon farming is to develop a footprint. That will provide you a baseline of where you are now and will outline what your total greenhouse gas emissions are for your property as well as what your emissions intensity is. And emissions intensity is also quite an important term to understand. So I'll talk about that again in my next slide. Carbon footprints are created using a whole heap of on-farm metrics. So the input such as fertilizer, herbicide, diesel, animal feed, bought-in animals, these sorts of things as well as what your production metrics are. So the number of lambs sold, your wool clip, your grain produced, what have you. And putting all these variables into a carbon calculator essentially will spit out a carbon footprint. We have one done for our Tarot Field Research Centre, which is basically a marina enterprise. I'm hoping to get one done here as well. But for now, I'll talk through the Tarot Field one. So 81%, which is this huge piece of pie here, of the emissions from Tarot Field are enteric methane emissions. So that's emissions that are created through animal digestion. An additional 9% of their emissions came from manure and dung. So they're also animal-related. So 90% of Tarot Field's emissions are directly animal-related. The other 10% is fertilizer, on-farm fuel use, electricity and pre-farm emissions. So in terms of emissions intensity, which is what I touched on before, that is the amount of carbon dioxide equivalent per kilogram of product produced. So it takes the total emissions. So say the total emissions is 100 kilos of CO2 and the total amount of sheet meat produced, say, is 50, then your emissions intensity for per kilo of production is going to be 2. That's a really easy example because that's the math that I can do in my head at the moment. In terms of a more realistic example, these are the emissions intensity from Tarot Field. So per kilo of sheet meat that was produced from that year at Tarot Field, 9.6 kilos of CO2 was produced per kilo of meat. And in terms of their wool production, per kilo of greasy wool produced, just over 26 kilos of carbon dioxide were emitted per kilo. So as part of the footprint that we had done, we had that done by a third-party provider. They also provided a range of options for us to reduce our emissions. So some of the options for reducing those emissions were an improvement in lambing and marking percentages. So that might be a little bit counter-intuitive because you're actually producing more animals, but your emissions intensity for those animals is decreased. So your production increases and your emissions intensity decreases. The second option was increased average daily weight gain for the weather labs, which is sort of along the same lines. By increasing the feeding regimes for these weathers, you're turning them off quicker so they have less time on your property. So the emissions intensity is reduced also. One of the negatives associated with that is obviously the increased feed costs that might be required, and that's something that you have to balance. The third option is the introduction of feed additives. So there are a range of options for feed additives that have potential anti-methanogenic effects for livestock. Some of these feed additives have the potential to drastically reduce enteric methane by up to about 90%, and some are obviously a little bit lower than that, so there's quite a broad scale. The downside to that is that they're not yet widely available, and we're also looking at the development of technologies and techniques to be able to deliver those supplements consistently to the animals throughout the year in grazing situations, which has been the main constraint so far. But there is a lot of opportunity in that area. The next opportunity is the introduction of anti-methanogenic pastures, which again, there are pastures that we know that have the ability to reduce the enteric methane production of animals. Once again, there needs to be a little bit more work in terms of the development of those pastures and in understanding exactly how they work and how those pastures can contribute to a system management regime for reducing methane production. And we need to make sure that those pastures are obviously relevant to the production system in which they'll be employed. And the last one here is implementing genetic lines that have reduced emissions capability. There's also some potential for the genetic adoption of anti-methanogenic lines. It is a relatively slow process, and that's something that you need to weigh up against your other genetic and breeding goals as well. The positive of lower emission genetics is that they tend to have an increased feed conversion efficiency, but it does take a longer time. So along that sort of footprint scheme, we've developed a series of carbon footprinting workshops that we've rolled out across the state with producers, and we have been lucky enough to secure a little bit more funding to deliver one in the southeast. So these footprint workshops have involved working one-on-one with producers to develop their own carbon footprint for their own property prior to the workshop, and that's been done by Integrity Ag and Environment, who are the company that we got to do our footprint at Tariful. Then we workshop through those footprints to sort of identify what your drivers and what your business goals are, so what carbon footprinting can mean for you and what carbon farming can mean for you as a business in terms of what your goals are going forward, and then to sort of really pull apart what your emissions are, where they're coming from and what your stores are, so how you're storing carbon on property and how we can manipulate those and what some of the options are to go towards carbon farming in the future and potentially reducing some of those emissions. So there is limited availability for those workshops if anybody's interested, come and talk to me. PERSA are sponsoring those, so they're free of charge for producers, but we do have limited availability, so if it's something that you're interested in pursuing from your own business, please do come and talk to me. We have some availability still, and those workshops will be done at the start of June, so producers during May will start to develop their own carbon footprint and then we'll workshop them in June. And just the last thing that I wanted to quickly talk to you about for producers that are maybe a little bit further along the line of carbon farming is that we've got a carbon farming demonstration pilot, which is a $1 million initiative that we have at the moment, which is providing grants of up to $100,000 for producers who can demonstrate carbon farming activities on their farm that have the potential to demonstrate carbon farming, which has the greatest applicability to South Australian primary industries. And also to start to look at the identification and development of those co-benefits that are happening alongside carbon farming. And the idea of that project is to really bridge the gap between where people are at the moment and what some of the opportunities are in terms of carbon farming down the track. There are lots and lots of online resources in terms of carbon farming, so Look C is a tool that's been developed by the CSIRO. You can input some basic on-farm metrics and it spits out a relatively basic carbon emissions and then walks you through some of the options in terms of ERF methodologies that might be applicable. Likewise, the cool farm tool is a tool that you can use online to input basic farm metrics and it gives you a broad overview of what your overall emissions are. And then for more information on emissions reductions from projects and methodologies, you can go to the website there. That's all. Thank you Emma, great insight. Any questions from the, there's a question at the back. Thank you for that. That was a great presentation. I really appreciate that. I have a small, I actually have lots of questions, but I keep it short. With the emission calculation, so you need to measure how much you emit when you go into a carbon project. Do you need to account what you emit against the carbon credits that you sequester? And if so, do you only need to do that, or do you need to do that across the entire farm or just in the project area that you're doing your project at? That's my question here. Yeah, so in terms of participating in an ERF project, it is the amount of carbon that's sequestered within a specific project area. So you don't need to account for the rest of the on-farm emissions. So on-farm emissions are really important if you're looking at overall carbon neutrality. But for the sake of an ERF project, it's a specific set of activities that you're undertaking to sequester or reduce those emissions. So it's those specific activities that are the most important thing. I'll show my ignorance here probably, but if a farm sells their carbon credits to somebody, does that mean they have to actually maintain a certain level of either sequestration or emissions or something over the longer term? I mean, what if the production changes or they change the business, you know, sells it or what? In other words, are they obligated to do something over the long term to maintain that? Yes, they absolutely are. So once, I think there's probably two points to that question. Once the credits are sold, they're gone. So those credits have been developed and gone. But the ERF projects that the methodologies that you enter into have longevity commitments attached to them. So a lot of them are up to about 25 years or can be as long as 100 years. So you do need to make a commitment when you enter into that methodology that you're going to maintain those processes or those practices for either 25 or 100 years. So I guess if things happen, say, for example, bushfire comes through, that obviously can negatively impact the carbon that you have stored in, say, vegetation. And that's something that needs to be managed going forward. So does it mean there's a future cost potentially for farmers? Yes, yeah, potentially. So that's one of the risks that need to be looked at before entering those projects. The Commonwealth government does have a scheme implemented whereby they don't provide 100% of the credits all at once. So they actually retain a little bit of their credits at each audit point just in case something happens so that the farmers are not then obligated to repay those credits. And that's something that needs to be done. Thank you.